A User's Handbook to the Rules of Preferential Origin used in trade

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A User's Handbook

to the

Rules of Preferential Origin used in trade between the

European Community and

other European countries

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CONTENTS

Page

Preface 5 General information 6

PART 1 Information concerning the concept of originating products

1 What is origin? 8 2 What is non-preferential origin? 8 3 What is preferential origin? 8 4 Can all products benefit from preferential origin? 9 5 Where can I find out if my goods qualify for preferential treatment? 9 6 What is tariff classification? 9 7 Are there any criteria other than working or processing that have to be fulfilled? 10 8 What is cumulation? 11 9 What is bilateral cumulation? 12 10 What is diagonal cumulation? 14 11 What is full cumulation? 15 12 What is the difference between diagonal and full cumulation? 16 13 What is pan-European cumulation? 17 14 Which countries are operating the pan-European cumulation system of origin? 17 15 Where can I find the Protocol for the country I am trading with? 18 16 Which Agreement applies to my goods? 19

PART 2 Analysis of an origin protocol

Introduction 22 Structure of the Origin Protocols 23 Title I: General Provisions 24 Article 1 - Definitions 25 Title II: Definition of the concept of "originating products" 28 Article 2 - General requirements 29 Questions:

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1 How can my product obtain origin? 30 2 What does "wholly obtained" mean? 30 3 What does sufficiently worked or processed mean? 31 Article 3 - Cumulation in the European Community 32 Article 4 - Cumulation in Bulgaria 36 Article 5 - Wholly obtained products 38 Article 6 - Sufficiently worked or processed products 41 Questions: 1 Are there any circumstances where non-originating materials can be used to produce an originating product? 45 2 How should Annex II be read? 46 Article 7 - Insufficient working or processing operations 49 Article 8 - Unit of qualification 52 Article 9 - Accessories, spare parts and tools 54 Article 10 - Sets 55 Article 11 - Neutral elements 57 Title III: Territorial requirements 58 Article 12 - Principle of territoriality 59 Article 13 - Direct transport 63 Article 14 - Exhibitions 66 Title IV: Drawback or Exemption 68 Article 15 - Prohibition of drawback or exemption from customs duties 68 Title V: Proof of origin 71 Article 16 - General requirements 72 Article 17 - Procedure for the issue of a movement certificate EUR1 74 Questions: 1 How should an application for a movement certificate be completed? 77 2 How should the EUR.1 movement certificate be completed? 78 3 How should I indicate origin if the goods in my consignment originate in more than one country? 79 Article 18 - Movement certificates EUR1 issued retrospectively 80 Article 19 - Issue of a duplicate movement certificate 83 Article 20 - Issue of movement certificates EUR.1 on the basis of a proof of origin issued or made out previously 85 Article 20a - Accounting segregation 87 Article 21 - Conditions for making out an invoice declaration 91

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1 How should I complete an invoice declaration? 94 Article 22 - Approved exporter 96 Questions: 1 What are the obligations incumbent on an approved exporter? 98 2 How can an exporter obtain "approved exporter" status? 99 Article 23 - Validity of proof of origin 100 Article 24 - Submission of proof of origin 102 Article 25 - Importation by instalments 103 Article 26 - Exemption from proof of origin 105 Article 27 - Supporting documents 107 Article 28 - Preservation of proof of origin and supporting documents 108 Article 29 - Discrepancies and formal errors 109 Article 30 - Amounts expressed in EUROs 110 Title VI: Arrangements for administrative co-operation 112 Article 31 - Mutual assistance 98 Article 32 - Verification of proofs of origin 99 Question: What are reasonable doubts? 101 Article 33 - Dispute settlement 102 Article 34 - Penalties 103 Article 35 - Free zones 104 Title VII: Ceuta and Melilla 105 Article 36 - Application of the Protocol 123 Article 37 - Special conditions 124 Title VIII: Final provisions 127 Article 38 - Amendments to the Protocol 127 Joint declaration concerning the Principality of Andorra 128 Joint declaration concerning the Republic of San Marino 128

Appendices

Appendix 1 - List of Official Journals of the European Union in which the Origin Protocols 128

Appendix 2 - Different linguistic versions of expressions to be used on proofs of origin and invoice declarations 136

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PREFACE

The aim of this Handbook is to provide a broad explanation to traders, students and anyone else looking for information on the preferential origin rules currently used in trade between the European Community and a large number of other European countries.

Therefore it is inevitable that there will be parts of this book which will contain information already well known to many of its users but which will be completely new to others. However, it will hopefully prove to be useful and informative overall to everyone who consults it.

The Handbook is divided into two distinct parts and has two appendices at the end. The first part addresses basic questions concerning origin while the second part concentrates on explaining the provisions of the origin protocols. This structure was felt to be necessary in order that those users who are unfamiliar with the subject of origin can start to better understand it through reading the first part. The explanations in the second part follow the order of the articles in the Origin Protocols that provide the legal basis for the origin rules.

Finally, as this is a handbook for users it is confined to the practical application of the provisions of the Protocols. Therefore the historical and legal background and the economic theory behind customs relations, etc., have not been touched on as they fall outside the scope of a practical handbook.

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GENERAL INFORMATION

This Handbook has no legal status. It is intended for information purposes only. The system of preferential rules of origin described in this Handbook is based on the legal provisions set out in the Agreements between the European Community and most of its European trading partners.

The rules of preferential origin described in this Guide apply to trade between the European Community and Bulgaria, the Czech Republic, Estonia, Hungary, Iceland, Latvia, Liechtenstein, Lithuania, Norway, Poland, Romania, the Slovak Republic, Slovenia, Switzerland and Turkey. Turkey was integrated into the system on 1 January 1999, for all products except those listed in Annex V to the Origin Protocols to the different Agreements. In the future other countries may be integrated in to the system.

The system of preferential origin rules described in this Handbook is commonly referred to as the pan-European cumulation system of origin rules. That term has no legal significance.

The terms "zone" or "pan-European zone" are to be taken to mean the territories of the countries operating the pan-European cumulation of origin rules unless otherwise stated. Likewise references to "partners" and "partner countries" are to be understood as meaning the countries operating the system of origin rules unless otherwise stated. None of those terms have any legal significance.

Examples in this Handbook are to be taken purely as illustrating how the system works in practical terms.

The Protocol used in this Handbook to illustrate and explain the system is that between the EC and Bulgaria. However the origin rules in all the Origin Protocols to the Agreements between the EC and the other countries referred to above, are identical.

Appendix 1 contains a list of the Official Journals of the European Union where the Origin Protocols with the different countries operating the system have been published.

(BACK TO CONTENTS)

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PART 1.

INFORMATION

CONCERNING THE

CONCEPT OF ORIGINATING PRODUCTS

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1. WHAT IS ORIGIN?

Simply put, origin is the "economic" nationality of goods traded in commerce. It is necessary to determine the nationality and tariff classification of goods (see Question 6 below for a brief explanation of tariff classification) in order to be able to determine the duties and equivalent charges or any customs restrictions or obligations applicable to them. There are two kinds of origin, non-preferential and preferential and the customs treatment of goods at importation is determined by the origin they have.

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2. WHAT IS NON-PREFERENTIAL ORIGIN?

Non-preferential origin merely confers an "economic" nationality on goods and does not confer any benefit on them. Non-preferential origin is obtained either by the goods being "wholly obtained" (The concept of "wholly obtained" is explained in the explanation for Article 5.) in one country or, when two or more countries are involved in the manufacture of a product, origin is obtained in the country where the last substantial, economically justified working or processing is carried out. Non-preferential origin is used, for example, in determining whether or not goods are subject to anti-dumping measures or quantitative restrictions and for statistical purposes. It can also be used to determine origin in the context of the "origin marking" (i.e. the "made in" label) of goods.


3. WHAT IS PREFERENTIAL ORIGIN?

Preferential origin is conferred on goods from particular countries when they have fulfilled certain criteria. Preferential origin criteria generally demand that goods undergo more working or processing than is required to obtain non-preferential origin. However, wholly obtained goods (See explanation to Article 5) can also benefit from preferential origin status. Preferential origin confers certain benefits on goods traded between countries that have agreed such an arrangement, usually entry at a reduced rate or free of duty.


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4. CAN ALL PRODUCTS BENEFIT FROM PREFERENTIAL ORIGIN?

In theory all products can benefit from preferential origin. In reality a country will not grant preferences to goods which it considers to be sensitive to its industries therefore such matters must be negotiated between the parties to an agreement. With regard to the Agreements covered by this Handbook, certain goods are excluded from the terms of the preferences offered. Therefore, please remember to always confirm that your goods are amongst those that are covered in the Agreement between your country and that of your trading partner.


5. WHERE CAN I FIND OUT IF MY GOODS QUALIFY FOR PREFERENTIAL TREATMENT?

In order to have preferential origin goods must fulfil the conditions of the Origin Protocol concerning the definition of the concept of "originating products". It means that the goods must either be wholly obtained (See explanation to Article 5) or undergo a certain amount of working or processing. Annexed to each origin protocol is a list of the working or processing each product must undergo in order to obtain preference. (Appendix I, to this Handbook, lists (with links) the various Official Journals of the EU in which the different origin protocols are published).

That list is based on the tariff classification of products in the Harmonized System (HS). So before being able to determine what processing your product must undergo it is necessary to know the HS tariff classification. (See question No. 6, which discusses tariff classification in more detail). Further information on how to read the annex on processing can be found in the reply to Question 2 in the explanation to Article 6 and in Annex I attached to each Origin Protocol.


6. WHAT IS TARIFF CLASSIFICATION?

Although tariff classification is itself a highly specialised field in the context of customs it is necessary to briefly discuss its meaning and significance here. Tariff classification derives from a system that has been devised to identify every item traded, be it something as simple as natural clay for the manufacture of pottery or the most up-to-date piece of medical equipment. In order to accomplish this, every item must be assigned a tariff code.

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Tariff codes are listed in the national tariffs of every country. In the case of all the countries and groupings concerned by this Handbook the classification system is based on the Harmonized Commodity Description and Coding System, also known as the "Harmonized System" or the "HS". The HS is broken down into 97 "Chapters" which are further broken down into 4 digit "headings"

Based on its tariff classification in combination with its origin, all duties or equivalent charges, preferences, quotas and ceilings, etc, can be determined for any product. In certain instances the tariff classification and non-preferential origin are both required (for example in the case of anti-dumping measures).

In the context of preferential origin it is essential to know the correct tariff heading as the working or processing required to obtain origin is also determined on the basis of the HS system. The list of origin conferring operations set out in Annex II to each Protocol lists products according to their classification in the HS.

It is therefore of vital importance that the correct tariff code is assigned to goods, otherwise problems and difficulties will arise for the exporter and/or importer. It must also be stressed that it is up to the trader to ensure that the correct tariff heading is assigned to his goods.

If you do not know the correct tariff classification of your goods you may approach your local customs office which will be able to assist you. However, in order for the customs to be in a position to help you, you must be able to clearly describe your product, detailing its constituent materials, its function, and, if required to do so, provide illustrative literature describing it.

(RETURN TO CONTENTS) (RETURN TO QUESTION 1) (RETURN TO QUESTION 5) (RETURN TO ARTICLE 8)

7. ARE THERE ANY CRITERIA OTHER THAN WORKING OR PROCESSING THAT HAVE TO BE FULFILLED?

Besides the requirements concerning working or processing there are also strict definitions concerning what is meant by nationality in the context of origin. This is especially crucial when determining the origin of fish and fish products. The explanation of Article 5 in Part 2 of this Handbook deals with "nationality" in the context of origin in more detail.


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8. WHAT IS CUMULATION?

The annex to the Origin Protocol ("Annex II") setting out the processes required to obtain origin outlines what must be done to a product for it to benefit from preferential origin. However in modern manufacturing it is quite common for two or more different sources in different countries to be involved in the production of goods. In cases where two or more countries operate the same rules of origin and have free trade agreements between them they can cumulate origin.

In the context of the Agreements covered by this Handbook, cumulation means that products that have obtained originating status in one partner country may be used with products originating in another partner country without prejudice to the preferential status of the finished product.

In the case of cumulation the working or processing carried out in each partner country on originating products does not have to be 'sufficient working or processing' within the meaning of Article 6 in order to confer on the finished product, the origin of the partner country but it must go beyond the minimal operations in Article 7.

Example 1

A product, wholly obtained in the Community is sent to Poland where it is further processed. The finished products will have Polish origin provided that the working or processing carried out in Poland goes beyond the minimal operations set out in Article 7. If the finished article is exported from Poland to the European Community it will be considered as having Polish origin.

Example 2

An incomplete machine originating in the Community is sent to Hungary where it undergoes further working or processing going beyond the minimal operations set out in Article 7. The machine is then sent to the Czech Republic where once again it undergoes working or processing going beyond the minimal operations of Article 7. The machine is completed and finished in the Czech Republic.

The product that leaves the Community has EU origin when it enters Hungary. The working or processing carried out in Hungary, being more than minimal, gives the product Hungarian origin. The final product has Czech origin because the working and processing there is more than minimal

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Non-originating materials or components must be sufficiently worked in order to obtain origin before they can benefit from the cumulation provisions laid down in the Agreements under consideration.

Example 3:

Woven cotton fabric of Egyptian origin is imported into the EU. It is simply cut into shapes before being exported to Poland where the shapes are sewn together to produce men's or boys shirts. All the finishing operations are carried out in Poland.

The final products will be considered as non-originating and will not benefit from the provisions of the EC-Poland Agreement. That is because the rule applicable to mens or boys shirts of HS heading 6205 specifies that in order to obtain preferential origin production within the zone must, at least, start from yarn. As the yarn has already been woven into fabric in Egypt, shirts manufactured from it will not obtain preferential origin.

Example 4:

Citrus fruits of Chapter 8 are imported into the EU from the United States. In the EU they are used to produce fruit juices of Heading 2009. Firstly they fulfil the change of heading criteria and they also fulfil the requirement that the materials of Chapter 17 do not exceed 30% of the ex-works price of the product. In this case the fruit juices obtain origin because the non-originating fruit has been sufficiently processed.

The condition that the goods being cumulated must be originating is designed to encourage the development of industry in the zone.

There are three varieties of cumulation concerned by this Handbook, bilateral cumulation, diagonal cumulation and full cumulation.


9. WHAT IS BILATERAL CUMULATION?

Bilateral cumulation is operated between two partners. It means that producers in either partner country can use materials and components originating in the other's country as if they originated in their own country and operations carried out in one partner country can be aggregated with the operations carried out in another partner country to

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confer originating status on goods traded between them.. (The symbol indicates a bilateral agreement).

Diagram A

Country A Country B

Example 1:

Linen fabric, originating in the EC, is exported to Slovakia where it is cut and made into garments for men and women. The garments are exported to the EC.

Because the fabric is originating in the EC it is treated as originating in Slovakia when made into garments there. The finished garments have Slovak preferential origin. (Under diagonal cumulation (see Question 10 below), they could also be exported to any of the other associated countries with Slovak preferential origin.)

Example 2

Milk, wholly obtained in Poland is exported to Germany where it is processed into cheese for export to Poland.

The milk is treated as if it were of EC origin. As all the processes involved in producing the cheese were carried out on an originating product (the milk), the finished product has satisfied the rules of origin and has EC origin. (If sent to another partner country of the pan-European cumulation zone, the cheese would also have EC origin, but under the terms of diagonal cumulation).

It should be noted that even though goods may obtain origin by virtue of bilateral cumulation, they will retain their origin if traded with another partner country of the system, not under bilateral cumulation but under diagonal cumulation. (See the next question).


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10. WHAT IS DIAGONAL CUMULATION?

Diagonal cumulation operates between more than two countries. If countries A, B and C have agreements with each other and each operates identical origin rules concerning the working or processing of non-originating materials, country A can apply diagonal cumulation in its trade with the other two partners, if their agreements provide for such cumulation.

For example, originating products from countries B and C can be used to produce an originating product in country A. The imports into Country A from countries B and C are under the bilateral agreements existing between Country A and the other two. However because all three countries operate an identical system of origin rules the originating status of all the components can be added together to retain the originating status of the final product. This is illustrated by diagram B, below.

Diagram B

Country A Country B

Country C From the diagram it is clear that the three countries in the transaction are bound together

by Agreements (indicated by the and symbols) between them. Each country must have identical origin rules with each of the other two countries concerned. It is not sufficient that Country A alone applies identical origin rules with the other two, they too must apply the same origin rules between themselves. A COUNTRY CAN ONLY OPERATE CUMULATION WITH THOSE COUNTRIES WITH WHICH IT HAS AN ORIGIN PROTOCOL PROVIDING FOR SUCH CUMULATION AND CONTAINING IDENTICIAL ORIGIN RULES.

In order to benefit from diagonal cumulation the working or processing must be carried out on originating products.

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Example 1:

Slovakia has agreements with Poland and the Czech Republic providing for cumulation and containing identical origin rules. Poland also has a similar agreement with the Czech Republic that contains the same origin rules it operates with Slovakia.

Therefore, Slovakia can use originating products from the Czech Republic and Poland to make a product that will have Slovak origin.

In another scenario Country A produces an originating product using originating materials from Country B. The product finished in Country A is then exported to Country C where it is incorporated into another product along with originating materials from a fourth country, Country D. All four countries have agreements with each other that provide for cumulation and they apply identical origin rules between themselves and as all the materials and components have originating status the final product is also originating

Example 2:

Slovakia produces an originating product using components that have Czech origin. The finished product will have Slovak origin. The Slovak product is then exported to Hungary where it is incorporated into a machine that also contains components with Polish origin. The machine produced in Hungary has Hungarian origin because all the components used to produce it are already originating in the zone and the components originating in Slovakia and Poland have been more than minimally worked or processed (See the explanation of Article 7 for more information on minimal processing).

(RETURN TO CONTENTS) (RETURN TO QUESTION 9)

11. WHAT IS FULL CUMULATION?

In the context of the pan-European cumulation origin rules full cumulation is only operated between the European Economic Area (EEA) partners. The EEA is comprised of the EC, Iceland, Norway and Liechtenstein. For origin purposes the EEA is regarded as one territory. Full cumulation means that all operations carried out in the EEA are taken into account when assessing the final origin. It does not require that the goods be originating in one of the EEA partner countries before being exported for further working

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or processing in other EEA partners but it does require that all the working or processing necessary to confer origin is carried out on the product.

To understand full cumulation better the following example illustrates how it works.

Example:

100% cotton yarn of Egyptian origin is imported into Portugal where it is manufactured into cotton fabric. That fabric retains its non-originating status in Portugal as the origin rule for fabric demands manufacture from fibre.

The non-originating fabric is exported from Portugal to Norway where it is manufactured into garments. In Norway the finished garments obtain preferential origin status because the processing carried out in Portugal is added to the processing carried out in Norway to produce originating garments. The double transformation requirement (i.e. from yarn to fabric to garment) has been fulfilled in the EEA.


12 WHAT IS THE DIFFERENCE BETWEEN DIAGONAL AND FULL CUMULATION?

The difference between diagonal and full cumulation is best illustrated by comparing the example below with the example quoted in the answer to Question 11.

Example:

100% cotton yarn of Egyptian origin is imported into Poland where it is manufactured into cotton fabric. That fabric retains its non-originating status in Poland as the origin rule for fabric demands manufacture from fibre.

The non-originating fabric is exported from Poland to Slovenia where it is manufactured into garments. The garments manufactured from the non-originating fabric in Slovenia cannot obtain preferential origin status because the rule for non-originating materials used in the manufacture of garments (i.e. manufacture from yarn) has not been fulfilled.

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The result would be the same if the non-originating fabric was exported from Poland to Germany and manufactured into garments there.


13. WHAT IS PAN-EUROPEAN CUMULATION?

Pan-European Cumulation is the term used to describe the diagonal cumulation system in operation between the European Community and a number of European countries. It is, however, a term that does not have any legal significance

Part 2 of this Handbook (Analysis of an Origin Protocol) deals with pan-European cumulation in greater detail.


14. WHICH COUNTRIES ARE OPERATING THE PAN-EUROPEAN CUMULATION SYSTEM OF ORIGIN?

The Member States of the EU (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom), Bulgaria, the Czech Republic, Estonia, Iceland, Hungary, Latvia, Liechtenstein, Lithuania, Norway, Poland, Romania, the Slovak Republic, Slovenia, Switzerland and Turkey. The Community and each of these countries have free trade agreements providing for such cumulation and containing identical origin rules, an essential feature for the operation of cumulation, and thus they can operate cumulation between them.

The EC has customs unions with Turkey, the Principality of Andorra and the Republic of San Marino. Products covered by the customs unions with Andorra and San Marino are treated in accordance with the provisions of the Origin Protocols to the Agreements. All the relevant Agreements contain Joint Declarations stating that products of Chapters 25 to 97 originating in Andorra and all products originating in the Republic of San Marino are to be considered as originating in the EU by the partner countries.

Turkey was integrated into the system on 1 January 1999 but cannot cumulate certain agricultural products that are indicated in Annex V to the Protocols. That means that Turkish originating goods of HS Chapters 25 to 97, inclusive, and some goods classified in the agricultural chapters of the HS (essentially processed agricultural

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products) can benefit from preference under the cumulation system. The position of Turkey with regard to origin and coverage of goods deserves a little more explaining.

(1) Industrial products, when traded between the European Community and Turkey are covered by the terms of the Customs Union between the Community and Turkey on the basis of the goods being in free circulation. Those products may benefit from pan-European cumulation only when they comply with the pan-European cumulation rules of origin.

(2) Agricultural products referred to in Annex V to the Origin Protocols are excluded both from the terms and benefits of the Customs Union between the Community and Turkey and from the cumulation provisions in the free trade agreements between the Community, the partners countries and Turkey.

For the purposes of trade between the Community and the other partners, agricultural products referred to in Annex V originating in Turkey must be treated as non-originating products when incorporated in the manufacture of goods or products subsequently exported to, or from, the EC. In cases where partner countries have included such Turkish agricultural products in the coverage of their agreements with Turkey they can trade such Turkish products with each other but they must always treat such Turkish products as non-originating in their trade with the Community and those partners who have excluded those products from the terms of their agreements. The same rule applies to products originating in the EC for the purposes of trade between Turkey and the other partners.


15. WHERE CAN I FIND THE PROTOCOL FOR THE COUNTRY I AM TRADING WITH?

The origin protocols to each agreement between the Community and its partners have been published in the L series of the Official Journal of the European Communities. The complete list of those Official Journals along with their dates of publication is set out in Appendix 1 to this Handbook.


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16. WHICH AGREEMENT APPLIES TO MY GOODS?

The agreement that applies to your goods is that which exists between your country and your trading partner's country (e.g. Poland, Hungary, etc.) or group of countries (e.g. EC, EEA) respectively. The following examples illustrate this point.

A point to be noted is that for historical reasons the Community has Agreements with the individual Member States of EFTA (i.e. Iceland, Norway and Switzerland (which has a customs union with Liechtenstein, a member state of the EEA)). However the Member States of EFTA have signed Agreements with the other partner countries as a single group. Example 3, below, illustrates that point.

Example 1:

A Polish exporter who wishes to ship a product from Poland to the United Kingdom will operate within the provisions of the agreement between Poland and the European Community. In this case as the United Kingdom is a Member State of the European Community it is the agreement between the exporters country and the EC that applies.

Example 2:

For a Norwegian exporter shipping a product from Norway to Belgium, either the Agreement establishing the European Economic Area or the EC-Norway Agreement applies.

Example 3:

The EFTA/Slovenia Agreement would apply to goods exported by an Icelandic exporter to Slovenia. (Iceland signed the Agreement with Slovenia not in its own right but as a Member State of EFTA).

Example 4

A Hungarian producer who wishes to export goods to Estonia will refer to the agreement between Hungary and Estonia.

Example 5

Turkish goods exported to Slovakia will be subject to the terms of the agreement between Turkey and Slovakia.

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A list of the agreements concerned by this Handbook, along with links to the edition of the Official Journal of the European Union in which they have been published, is set out in Appendix 1. However if for whatever reason you cannot access the agreement that interests you, you are advised to contact your government information office, which should be able to fulfil your requirements.

Please also see the matrix of agreements which was published in Official Journal of the European Union No. C100, page 5 which sets out the agreements in force between the different partner countries operating pan-European cumulation rules of origin.


http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=52002XC0425(04)&model=guicheti

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=52002XC0425(04)&model=guicheti

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PART 2.

EXPLANATION OF AN

ORIGIN PROTOCOL

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INTRODUCTION

Part 2 of this Handbook provides an examination and explanation of the origin protocols to the Agreements in force between the Community and its partner countries and between the partners themselves.

This examination is done on an article by article basis. It is considered that this method provides a clear picture of what is, after all, a complex subject. Each Article is reproduced and then followed by a simple explanation and, where it is considered helpful, relevant examples. It cannot be stressed often enough that this Handbook is purely explanatory in nature and has no legal standing.

Operators should remember that when they have doubts as to which of a number of articles apply to a particular situation a simple general rule is to examine the relevant articles in numerical order and eliminate them on that basis.


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STRUCTURE OF THE ORIGIN PROTOCOLS

Each Protocol is divided up into eight sections called "Titles". Titles cover all aspects of the origin system put in place by the Protocol. The eight titles in the relevant Protocols are the following: Title I General provisions Title II Definition of the concept of "originating products" Title III Territorial requirements Title IV Drawback or exemption Title V Proof or origin Title VI Arrangements for administrative Cupertino Title VII Ceuta and Melilla Title VIII Final provisions Within those eight groups is the legal basis for the origin system currently in force in the so-called pan-European cumulation zone. Each Title contains a number of Articles, each of which covers a specific aspect of the Protocol. This Part of the Handbook will explain the origin system on a title by title, article by article basis. (RETURN TO CONTENTS)

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Title I

General Provisions Title I covers only one article. That article sets out the legal definitions of the various terms encountered in the Protocol. Please be aware that the definitions in Article 1 are legal definitions and not dictionary definitions. (RETURN TO CONTENTS)

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Article 1

Definitions

For the purposes of this Protocol:

(a) "manufacture" means any kind of working or processing including assembly or

specific operations;

(b) "material" means any ingredient, raw material, component or part, etc., used in the

manufacture of the product;

(c) "product" means the product being manufactured, even if it is intended for later

use in another manufacturing operation;

(d) "goods" means both materials and products;

(e) "customs value" means the value as determined in accordance with the

1994 Agreement on implementation of Article VII of the General Agreement on

Tariffs and Trade (WTO Agreement on customs valuation);

(f) "ex-works price" means the price paid for the product ex works to the

manufacturer in the Community or in Bulgaria in whose undertaking the last

working or processing is carried out, provided the price includes the value of all the

materials used, minus any internal taxes which are, or may be, repaid when the

product obtained is exported;

(g) "value of materials" means the customs value at the time of importation of the non-

originating materials used, or, if this is not known and cannot be ascertained, the

first ascertainable price paid for the materials in the Community or in Bulgaria;

(h) "value of originating materials" means the value of such materials as defined in (g)

applied mutatis mutandis;

(i) "value added" shall be taken to be the ex-works price minus the customs value of

each of the materials incorporated which originate in the other countries referred to

in Articles 3 and 4 or, where the customs value is not known or cannot be

ascertained, the first ascertainable price paid for the materials in the Community or

in Bulgaria;

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(j) "chapters" and "headings" mean the chapters and the headings (four-digit codes)

used in the nomenclature which makes up the Harmonized Commodity Description

and Coding System, referred to in this Protocol as "the Harmonized System" or

"HS";

(k) "classified" refers to the classification of a product or material under a particular

heading;

(l) "consignment" means products which are either sent simultaneously from one

exporter to one consignee or covered by a single transport document covering their

shipment from the exporter to the consignee or, in the absence of such a document,

by a single invoice;

(m) "territories" includes territorial waters.

EXPLANATORY NOTE Article 1 (f) - "Ex-works price' The ex-works of a product shall include: - the value of all supplied materials used in manufacture, - all costs (material costs as well as other costs) effectively incurred by the manufacturer.

For example, the ex-works price of recorded video cassettes, records, discs, media-carrying computer software and other such products comprising an element of intellectual property rights shall as far as possible include all costs with regard to the use of intellectual property rights for the manufacture of the goods, paid for by the manufacturer, whether or not the holder of such rights has his seat or residence in the country of production. No account shall be taken of commercial price reductions (e.g. for early payment, or large quantity deliveries).

COMMENTS: Article 1 defines the legal meanings of all the terms used in the Protocol.

Article 1(k) refers to the classification of a product or material under a particular heading of the Harmonized System. Responsibility for ensuring that goods are correctly classified in the HS lies with the trader. If you are unable to determine the correct tariff classification of your goods you should approach your local customs office which will be able to assist you. However, in order for them to be able to help you it will be necessary for you to provide the customs with as much information as they require.

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Please be aware that an incorrect tariff classification can lead to inconvenience for you and your trading partner and can result in a loss of time and money for either or both of you.

It is essential that you familiarise yourself with meanings of the various terms used in the context of the Protocol. The definitions are the same in all the Origin Protocols concerned. (RETURN TO CONTENTS)

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Title II

Definition of the concept of "originating products" Following the definitions of the terminology used in the Protocols, Title II proceeds, in the space of 10 articles, to define the concept of preferential origin in the context of the Agreements.

As mentioned in the preface the articles follow a logical progression starting with the basic elements and proceeding to the more complex concepts. For example Articles 3 and 4 deal with cumulation (both bilateral and diagonal cumulation) whereas Articles 5 and 6 deal with the means by which goods can obtain preferential origin. Thus the concept is explained before it is revealed how it can be obtained.

As a general rule traders should proceed in the same manner. You must determine whether your goods are wholly obtained or whether they incorporate non-originating materials and whether those materials have undergone sufficient working or processing to satisfy the relevant list rule.


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Article 2

General requirements

1. For the purpose of implementing this Agreement, the following products shall be

considered as originating in the Community:

(a) products wholly obtained in the Community within the meaning of Article 5;

(b) products obtained in the Community incorporating materials which have not been

wholly obtained there, provided that such materials have undergone sufficient

working or processing in the Community within the meaning of Article 6;

(c) goods originating in the European Economic Area (EEA) within the meaning of

Protocol 4 to the Agreement on the European Economic Area.

2. For the purpose of implementing this Agreement, the following products shall be

considered as originating in Bulgaria :

(a) products wholly obtained in Bulgaria within the meaning of Article 5;

(b) products obtained in Bulgaria incorporating materials which have not been wholly

obtained there, provided that such materials have undergone sufficient working or

processing in Bulgaria within the meaning of Article 6.

(RETURN TO ARTICLE 12)

COMMENTS:

This Article sets out the criteria that must apply to goods in order that they can be considered as originating in the Community and the partner countries. (Remember that the example Protocol being used in this analysis is that between the Community and Bulgaria. The same criteria apply to goods from any of the countries operating the system).

Article 2(1)(b) states that any non-originating materials used in the production of originating products must have undergone sufficient working or processing in the country of manufacture. It means that non-originating materials can be used in the Community or

30

in Bulgaria, in this instance, to produce an originating product provided those materials undergo sufficient working or processing in the Community or in Bulgaria.

When non-originating materials that have been imported into the Community or any country of the zone do not undergo sufficient working or processing, those materials retain their non-originating status and cannot benefit from preferential treatment under the terms of the origin protocol when imported into another country of the zone. For example, if non-originating goods are imported into the Community they must undergo sufficient working or processing in the Community and obtain origin there. The same condition applies to Bulgaria (or any other partner country). When the materials have obtained origin they can then be sent to the other partner country where they can undergo further processing and obtain the preferential origin of that partner. This is explained in detail further on in the Handbook.

The term "preferential origin" and "originating" in the context of the Agreements under consideration here refers only to materials or goods originating in the Community or one of the partner countries belonging to the pan-European zone. It does not refer to materials or goods that may have preferential originating status in other preferential regimes being operated by the Community or its partners. This means that goods which have ACP (African, Caribbean or Pacific) or GSP (Generalised System of Preference) origin are regarded as non-originating materials or products for the terms of the pan-European cumulation of origin system.

QUESTIONS:

1. HOW CAN MY PRODUCTS OBTAIN ORIGIN?

As explained in the answer to question 1, origin is the economic nationality of a product. Origin can be obtained either by goods being wholly obtained (Articles 2(1)(a) and 2(2)(a)) or by sufficient working or processing (Articles 2(1)(b) and 2(2)(b)).


2. WHAT DOES "WHOLLY OBTAINED" MEAN?

The term wholly obtained covers such things as fresh produce e.g. (fruit and vegetables) grown and harvested in the country of exportation or mineral products mined there. Note however that the concept of wholly obtained does not necessarily mean the total exclusion of imported elements. For example, the rule refers to vegetable products

31

"harvested there" but that does not exclude the use of imported seed to grow those vegetables.

Goods produced in one country entirely from products wholly obtained in that country are themselves wholly obtained products.

Article 5 explains which products can be considered as wholly obtained. More details concerning this concept are provided in the explanation attached to Article 5.


3. WHAT DOES SUFFICIENTLY WORKED OR PROCESSED MEAN?

As a result of the modern international division of labour and changing technology most goods traded will contain raw materials, semi-processed products, components etc., from more than one country.

For a product to obtain origin in such cases it is necessary for it to have undergone a minimum process or number of processes during the course of its manufacture. The obligatory operations or processing required on non-originating goods are clearly outlined in Article 6 and in columns 3 and 4 of Annex II to the Origin Protocols.

Article 6 of the Origin Protocols deals with sufficient working and processing and further details concerning that concept are provided in the explanation of that Article.


32

Article 3

Cumulation in the Community

1. Without prejudice to the provisions of Article 2 (1), products shall be considered as

originating in the Community if such products are obtained there, incorporating

materials originating in Bulgaria, Switzerland (including Liechtenstein)1, the Czech

Republic, Estonia, Hungary, Iceland, Lithuania, Latvia, Norway, Poland, Romania,

Slovenia, the Slovak Republic, Turkey2 or in the Community in accordance with the

provisions of the Protocol on rules of origin annexed to the Agreements between the

Community and each of these countries, provided that the working or processing

carried out in the Community goes beyond the operations referred to in Article 7. It

shall not be necessary that such materials have undergone sufficient working or

processing.

2. Where the working or processing carried out in the Community does not go beyond

the operations referred to in Article 7, the product obtained shall be considered as

originating in the Community only where the value added there is greater than the

value of the materials used originating in any one of the other countries referred to in

paragraph 1. If this is not so, the product obtained shall be considered as originating

in the country which accounts for the highest value of originating materials used in

the manufacture in the Community.

3. Products, originating in one of the countries referred to in paragraph 1, which do not

undergo any working or processing in the Community, retain their origin if exported

into one of these countries.

4. The cumulation provided for in this Article may only be applied to materials and

products which have acquired originating status by the application of rules of origin

identical to those given in this Protocol.

The Community shall provide Bulgaria, through the Commission of the European

Communities, with details of the Agreements and their corresponding rules of origin,

which are applied with the other countries referred to in paragraph 1. The

Commission of the European Communities shall publish in the Official Journal of

the European Union (C series) the date on which the cumulation, provided for in this

1 The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting

Party to the Agreement on the European Economic Area. 2 Cumulation as provided for in this Article does not apply to materials originating in Turkey

which are mentioned in the list at Annex V.

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Article may be applied by those countries listed in paragraph 1 which have fulfilled

the necessary requirements.


EXPLANATORY NOTE Article 3 and 4 - Cumulation In general, the origin of the final product will be determined through the "last working or processing' carried out provided that the operations carried out go beyond those referred to in Article 7. If, in the country of final manufacture, the originating materials from one or more countries are not subject to working or processing going beyond minimal operations, the origin of the final product shall be allocated to the country contributing the highest value. For this purpose, the value added in the country of final manufacture is compared with the value of the materials originating in each one of the other countries. If no working or processing is carried out in the country of export, the materials or products simply retain their origin if they are exported to one of the countries concerned. The following examples explain how to determine origin according to the three paragraphs of Articles 3 and 4: EXAMPLES 1. Example for allocation of origin through the last working or processing carried out

(paragraph 1)

Fabrics (HS 5112; obtained from lambs' wool not combed or carded) originating in the Community are imported into the Czech Republic; lining, made of man-made staple fibre (HS 5513) is originating in Hungary.

In the Czech Republic, suits (HS 6203) are made up.

The last working or processing is carried out in the Czech Republic; the working or processing (in this case, making-up suits) goes beyond operations referred to in Article 7. Therefore, the suits obtain Czech origin.

2. Example for allocation of origin if the last working or processing does not go

beyond minimal operations; recourse has to be taken to the highest value of the materials used in the manufacture (paragraph 2)

The different parts of an ensemble, originating in two countries, are packed in Slovenia. The trousers and a skirt, originating in Poland, have a value of EUR 180; the jacket, originating in the Community, has a value of EUR 100. The minimal operation (packing) carried out in Slovenia costs EUR 2. The operator uses plastic bags from Ukraine, of a value of EUR 0,5. The ex-works price of the final product is EUR 330.

As the operation in Slovenia is a minimal one the value added there has to be compared with the customs values of the other materials used in order to allocate origin:

34

Value added in Slovenia (which includes EUR 2 for the operation and EUR 0,5 for the bag) = EUR 330 (ex-works price) (minus) EUR 280 (180 + 100)= EUR 50 = Slovenia "added value'.

The Polish value (180) is higher than the value added in Slovenia (50) and the values of all other originating materials used (100). Therefore, the final product will have Polish origin.

3. Example for products that are exported without undergoing further working or

processing (paragraph 3)

A carpet, originating in the Community, is exported to Slovak Republic and is, without undergoing further operations, imported into Poland after two years. The carpet does not change origin and still has Community origin upon importation into Poland.

COMMENTS:

To obtain Community preferential origin under this Article, goods must be produced in the Community using either materials originating in the Community or in one or more of the other countries listed in Article 3(1). This means that a Community producer may use originating Community components or materials or components and materials originating in any of the partner countries in the production of his product.

Example 1:

Flax originating in Poland is imported into Germany where it is spun into linen yarn. The linen yarn would have Community origin. The linen yarn is then woven into linen fabric and then made into suits and costumes for women. The suits and costumes would have Community origin when exported to another country of the zone.

Example 2:

Wholly obtained flax is spun into linen yarn and woven into linen fabric in Poland. The fabric is imported into Germany where it is cut and made into suits and costumes for women. Again, the finished garments will have Community origin when exported to another country of the zone.

Article 6 explains the working or processing that is sufficient to confer origin when working on non-originating materials or parts. When working on materials or parts originating in one of the partner countries, i.e. when using cumulation, these rules do not apply. However, for the finished product to obtain Community origin the working or processing must go beyond the minimal processes listed in Article 7.

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If the operations carried out do not go beyond the minimal operations, the origin of a product will be allocated on the basis of the highest value added during its production. The highest value added will be determined by comparing the value added in the Community with the value of the materials that originate in each one of the other partner countries supplying originating materials.

POINT TO REMEMBER. When goods enter the Community from one of the partner countries and are exported to another of the partners without having undergone any working or processing in the Community, those goods retain the origin of the partner country from which they were exported to the Community.

Example 3:

Crystal drinking glasses, wholly obtained in the Czech Republic, are exported to Germany. The goods have Czech origin. The German importer later exports the same glasses to Estonia. In this case the glasses retain their Czech origin.


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Article 4

Cumulation in Bulgaria

1. Without prejudice to the provisions of Article 2(2), products shall be considered as

originating in Bulgaria if such products are obtained there, incorporating materials

originating in Bulgaria, Switzerland (including Liechtenstein)1, the Czech Republic,

Estonia, Hungary, Iceland, Lithuania, Latvia, Norway, Poland, Romania, Slovenia,

the Slovak Republic, Turkey2 or in the Community in accordance with the provisions

of the Protocol on rules of origin annexed to the Agreements between Bulgaria and

each of these countries, provided that the working or processing carried out in

Bulgaria goes beyond the operations referred to in Article 7. It shall not be necessary

that such materials have undergone sufficient working or processing.

2. Where the working or processing carried out in Bulgaria does not go beyond the

operations referred to in Article 7, the product obtained shall be considered as

originating in Bulgaria only where the value added there is greater than the value of

the materials used originating in any one of the other countries referred to in

paragraph 1. If this is not so, the product obtained shall be considered as originating

in the country which accounts for the highest value of originating materials used in

the manufacture in Bulgaria.

3. Products, originating in one of the countries referred to in paragraph 1, which do not

undergo any working or processing in Bulgaria, retain their origin if exported into

one of these countries.

4. The cumulation provided for in this Article may only be applied to materials and

products which have acquired originating status by the application of rules of origin

identical to those given in this Protocol.

Bulgaria shall provide the Community, through the Commission of the European

Communities, with details of the Agreements and their corresponding rules of origin,

which are applied with the other countries referred to in paragraph 1. The

Commission of the European Communities shall publish in the Official Journal of

the European Union (C series) the date on which the cumulation provided for in this

1 The Principality of Liechtenstein has a customs union with Switzerland, and is a Contracting

Party to the Agreement on the European Economic Area. 2 Cumulation as provided for in this Article does not apply to materials originating in Turkey which

are mentioned in the list at Annex V.

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Article may be applied by those countries listed in paragraph 1 which have fulfilled

the necessary requirements. (RETURN TO ARTICLE 12) COMMENTS:

The comments which applicable to Article 3 apply also to Article 4 except that instead of cumulation in the Community, it refers to cumulation in the partner country.


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Article 5

Wholly obtained products

1. The following shall be considered as wholly obtained in the Community or in

Bulgaria:

(a) mineral products extracted from their soil or from their seabed;

(b) vegetable products harvested there;

(c) live animals born and raised there;

(d) products from live animals raised there;

(e) products obtained by hunting or fishing conducted there;

(f) products of sea fishing and other products taken from the sea outside the

territorial waters of the Community or of Bulgaria by their vessels;

(g) products made aboard their factory ships exclusively from products referred to

in (f);

(h) used articles collected there fit only for the recovery of raw materials, including

used tyres fit only for retreading or for use as waste;

(i) waste and scrap resulting from manufacturing operations conducted there;

(j) products extracted from marine soil or subsoil outside their territorial waters

provided that they have sole rights to work that soil or subsoil;

(k) goods produced there exclusively from the products specified in (a) to (j).

2. The terms "their vessels" and "their factory ships" in paragraph 1(f) and (g) shall

apply only to vessels and factory ships:

(a) which are registered or recorded in a Member State of the Community or in

Bulgaria;

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(b) which sail under the flag of a Member State of the Community or of Bulgaria;

(c) which are owned to an extent of at least 50 per cent by nationals of a Member

State of the Community or of Bulgaria, or by a company with its head office in

one of these States, of which the manager or managers, Chairman of the Board

of Directors or the Supervisory Board, and the majority of the members of such

boards are nationals of a Member State of the Community or of Bulgaria and of

which, in addition, in the case of partnerships or limited companies, at least half

the capital belongs to those States or to public bodies or nationals of the said

States;

(d) of which the master and officers are nationals of a Member State of the

Community or of Bulgaria;

and

(e) of which at least 75 per cent of the crew are nationals of a Member State of the

Community or of Bulgaria.

COMMENTS:

Article 5 defines for the purposes of the Protocol what wholly obtained means and lists the goods covered by that term.

The following points should be noted:

1. In the case of industrial products, operations to produce a finished product may be carried out in different factories, but so long as those factories are situated in the same country or territory and process only materials wholly obtained there, the final product will be wholly obtained.

2. The open sea (the sea beyond territorial waters) has no nationality. Fish caught outside the territorial waters of a partner country shall be considered as wholly obtained provided the vessel fulfils the 5 important criteria at Article 5(2) a) to e) inclusive.

40

EXAMPLES:

1. Wood felled in Germany is imported into France where it is manufactured into chemical pulp (heading 4701 of the HS) using only chemical products originating in the Community. The product is wholly obtained in the EC.

2. Wine bottle corks manufactured in Portugal using natural cork or waste cork produced in Portugal. The corks have been wholly obtained in the EC.

3. Linen fabric woven in Italy from flax harvested and spun in France has been wholly obtained in the EC.

4. Basketwork and wickerwork manufactured in Poland from willow, reeds, rushes etc., harvested in Poland is wholly obtained in Poland.

5. Articles of non-treated natural wood manufactured in Slovenia using wood from trees felled in Slovenia are considered to be wholly obtained in Slovenia.

6. Fish are caught in Polish territorial waters by Spanish fishing vessels and are landed in Spain. In this instance the fish are regarded as wholly obtained in Poland as they are caught in the territorial waters of Poland.

7. Fish are caught in the open sea (outside territorial waters) by a vessel flying the Polish flag and satisfying the other nationality conditions of the Protocol. They are prepared and frozen on the vessel before being landed in a French port. In this case the fish are regarded as being wholly obtained in Poland.

8. Fish caught in the open sea by a vessel flying the Estonian flag are landed in an Estonian port and then transported by road to the Community (for example to Germany) under transit arrangements. The fish are regarded as being wholly obtained in Estonia.

(RETURN TO CONTENTS) (RETURN TO QUESTION 2) (RETURN TO QUESTION 3) (RETURN TO QUESTION 7)

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Article 6

Sufficiently worked or processed products

1. For the purposes of Article 2, products which are not wholly obtained are considered

to be sufficiently worked or processed when the conditions set out in the list in

Annex II are fulfilled.

The conditions referred to above indicate, for all products covered by the Agreement,

the working or processing which must be carried out on non-originating materials

used in manufacturing and apply only in relation to such materials. It follows that if

a product which has acquired originating status by fulfilling the conditions set out in

the list is used in the manufacture of another product, the conditions applicable to the

product in which it is incorporated do not apply to it, and no account shall be taken of

the non-originating materials which may have been used in its manufacture.

2. Notwithstanding paragraph 1, non-originating materials which, according to the

conditions set out in the list, should not be used in the manufacture of a product may

nevertheless be used, provided that:

(a) their total value does not exceed 10 per cent of the ex-works price of the product;

(b) any of the percentages given in the list for the maximum value of

non-originating materials are not exceeded through the application of this

paragraph.

This paragraph shall not apply to products falling within Chapters 50 to 63 of the

Harmonized System.

3. Paragraphs 1 and 2 shall apply subject to the provisions of Article 7.

COMMENTS:

As a result of the modern international division of labour and changing technology most goods traded will contain raw materials, semi-processed products, components, etc., which originate in more than one country.

42

In order that a product can obtain origin in such cases it is necessary for it to have undergone a particular process or number of processes during the course of its manufacture.

In the case of pan-European cumulation of origin this Article does not apply to goods which have already obtained originating status in the Community or one of the partner countries belonging to the pan-European cumulation zone. It applies only to non-originating materials used in the production of goods for which originating status is claimed. The minimum obligatory operations or processing required on non-originating goods are outlined in columns 3 and 4 of Annex II to the Origin Protocols.

In the majority of cases the rule is specified in column 3. Where there is a rule set out in column 4, the exporter may opt for either the rule in column 3 or column 4. Where there is no rule set out in column 4, the rule in column 3 is the rule that applies.

If the working or processing goes even further, i.e. starts at an earlier production stage than that specified in the Annex, the finished product will also obtain originating status. However, origin cannot be obtained by starting production at a later stage.

There are three criteria used in determining sufficient working or processing:

a) value percentage, which means that the value of the non-originating materials must not exceed a certain percentage of the ex-works price of the finished product;

b) change of tariff heading: where the non-originating raw materials or components used must have a different HS tariff heading from the HS tariff heading of the finished product.

c) specific rules: where very specific criteria are laid down

The following examples illustrate the concept of sufficient working or processing:

Examples:

Value-added:

Goods: Office machines

HS headings 8456 to 8466

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Rule: Manufacture in which the value of all the materials used does not exceed 40% of the ex-works price of the product

Explanation All the non-originating materials used in the manufacture of office machines must not account for more than 40% of the ex-works price of the finished product. Therefore, the value of the originating materials and the working or processing, including administrative costs and profit, carried out during the manufacture of the office machines must account for at least 60% of the ex-works price of the finished products.

Change of tariff heading:

Goods Ceramic products

HS heading Chapter 69

Rule: Manufacture in which all the materials used are classified within a heading other than that of the product

Explanation: This simply means that all non-originating materials used to produce ceramic products must come from a heading other than that of the finished product.

Specific rule:

a) Goods: Preparations of fish or of crustaceans, molluscs or other aquatic invertebrates

HS heading ex Chapter 16

Rule: All the materials of Chapter 3 used must be wholly obtained

Explanation: This rule demands that all the products of Chapter 3 used in the production of goods of Chapter 16 must have originating status by virtue of being wholly obtained. Any materials or products of headings other than Chapter 3 that are used may be non-originating.

b) Goods: Mens or boys cotton shirts, not knitted or crocheted

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HS heading ex-Chapter 62

Rule: Manufacture from yarn

Explanation: In order to obtain origin for shirts made from non-originating materials, those materials must be at no later stage of production than yarn. If the production of the shirts starts at a later stage e.g. from non-originating fabric, the end product will not obtain origin. However, if it starts at an earlier stage, i.e. from non-originating fibres the end product will obtain preferential originating status.

The rule indicates the minimum processing permitted to confer originating status on the shirts when they are made from non-originating materials.

An examination of Annex II reveals that there are some rules that are a mixture of the above three categories of rules or where there are alternative rules open to the manufacturer.

In some cases there are alternative rules in columns 3 and 4. However, mixing of the rules in either column is not permitted. One or the other must be fulfilled in its entirety.

Examples:

Goods: Ester gums

HS heading ex-3806

Rule in column 3 Manufacture from resin acids

Rule in column 4 manufacture in which the value of all the materials used does not exceed 40% of the ex-works price of the product

Explanation: The exporter can opt to either manufacture the ester gums from non-originating resin acids or alternatively use non-originating materials and ensure that the value of any originating materials and the processing he undertakes accounts for at least 60% of the ex-works price of the ester gums before claiming origin.

In cases where there are more than one criterion indicated in column 3 for a product, all the criteria set out in that column must be met.

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Goods: Jams

HS heading ex-2007

Rule: Manufacture in which - all the materials used are classified within a heading other than that of the product the value of any materials of Chapter 17 used does not exceed 30% of the ex- works price of the product

Explanation: In order to obtain preferential origin the jam must fulfil both the conditions set out in column 3. Therefore all the non-originating materials used in the manufacture of the jams must be classified in a heading other than 2007 and the value of any non-originating materials of Chapter 17 used cannot exceed 30% of the ex-works price of the jams. Fulfilling only one of those conditions is not enough.

Of course, if the materials of Chapter 17 are originating only the first criterion need be fulfilled.

All the rules in Annex II only apply to non-originating materials or products.


QUESTIONS:

1. ARE THERE ANY CIRCUMSTANCES WHERE NORMALLY PROHIBITED NON-ORIGINATING MATERIALS CAN BE USED TO PRODUCE AN ORIGINATING PRODUCT?

Yes. Article 6(2) grants a tolerance allowing the use of a small amount of non-originating materials to be used in the manufacture of goods.

The concession allows for non-originating materials to be used up to a maximum value of 10% of the ex-works price. However, where there are percentages listed in Annex II for a maximum value of prohibited non-originating materials, the maximum in the list cannot be exceeded by applying this 10% tolerance. The maximum will always be that

46

allowed in the list. The 10% tolerance rule can be used, for example, when applying the change of tariff heading rule.

NB. Textile goods of Chapters 50 to 63, inclusive, are excluded from benefiting from this tolerance. However, tolerances are granted to textiles products of Chapters 50 to 63, inclusive, and your attention is drawn to Note 5 of the Introductory Notes to Annex II which are set out in Annex I to every Protocol.


2. HOW SHOULD ANNEX II BE READ?

Before attempting to read Annex II you are advised to read Annex I where you will find Introductory Notes to Annex II. Those notes explain how to read Annex II and in some cases provide examples.

a) The working or processing referred to in Annex II refers to operations which must be carried out on non-originating materials before they can obtain originating status which would make them eligible for the benefits of preferential origin.

The listed operations are the minimum that goods to must undergo in order to obtain origin. Processing may start at an earlier stage but never at a later one.

Example:

1. Shirts for men or boys are classified in heading 6205 regardless of what fabric they consist of. As Annex II does not have a specific rule for such garments the rule applicable is "manufacture from yarn".

This means that in order for the shirts to obtain preferential origin the non-originating materials used in their manufacture cannot have been manufactured beyond the stage of yarn. However, you may manufacture the yarn from non-originating fibres and still obtain origin but you cannot benefit from preference if you manufacture the shirts from non-originating fabric.

47

b) Column 1 indicates the tariff heading. As already explained the tariff heading is of vital importance if you are to obtain origin for your goods because without it you will not know which rule must be fulfilled. Column 1 covers every tariff heading in the Harmonized System, even though they may not be specifically mentioned. Each tariff Chapter is sectioned in a "box" in the Annex.

If a specific rule is not mentioned for your product you must refer back to the top of the section dealing with the tariff chapter you are concerned with.

Example:

2. Microwave ovens are classified in tariff heading 8516. Column 1 in Annex II to the Protocol makes no reference to a specific rule for goods of 8516. In this case the rule is to be found at the beginning of the section at "ex-Chapter 85".

(c) When all of the goods falling within a Chapter or Heading are not subject to the same rule "ex" is placed before the Chapter or Heading number. In the above example "ex-Chapter 85" means that the corresponding rules shown in Columns 3 and 4 apply to goods classified in Chapter 85 with certain exceptions. The exceptions are then listed beneath the heading description in Column 2 with their corresponding tariff classification in Column 1 and rules in Columns 3 and 4. These rules may apply only to some goods falling within the heading.

Example:

3. Letter pads are classified with registers and diaries in heading 4820. A search down Column 1 leads to a reference to "ex-4820" alongside a reference to letter pads (Column 2) and a specific rule (Column 3).

The "ex" indicates that not all products of heading 4820 are covered by the rule shown in Column 3. Although

48

diaries and registers are classified in the same heading as the letter pads, they are not specifically mentioned in Column 2 and therefore are subject to the general rule that applies to Chapter 48.

Therefore, when searching for the rule appropriate to your goods it is advisable to start at the top of column 1 in the relevant "section" or "box" and work your way down the list. If your product does not have a specific rule attached to it then you look at the more general rule applying to either the appropriate heading or Chapter which will be located further up the column.


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Article 7

Insufficient working or processing operations

1. Without prejudice to paragraph 2, the following operations shall be considered as

insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 6 are satisfied:

(a) preserving operations to ensure that the products remain in good condition

during transport and storage; (b) breaking-up and assembly of packages; (c) washing, cleaning; removal of dust, oxide, oil, paint or other coverings; (d) ironing or pressing of textiles; (e) simple painting and polishing operations; (f) husking, partial or total bleaching, polishing, and glazing of cereals and rice; (g) operations to colour sugar or form sugar lumps; (h) peeling, stoning and shelling, of fruits, nuts and vegetables; (i) sharpening, simple grinding or simple cutting; (j) sifting, screening, sorting, classifying, grading, matching; (including the

making-up of sets of articles); (k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or

boards and all other simple packaging operations; (l) affixing or printing marks, labels, logos and other like distinguishing signs on

products or their packaging; (m) simple mixing of products, whether or not of different kinds; (n) simple assembly of parts of articles to constitute a complete article or

disassembly of products into parts; (o) a combination of two or more operations specified in (a) to (n); (p) slaughter of animals.

2. All operations carried out either in the Community or in Bulgaria on a given product

shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1.

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COMMENTS:

Just as there is sufficient working or processing there is also the opposite, insufficient working or processing sometimes referred to (although not in the legislation) as minimal processing or minimal operations. Certain processes are considered as having such a minor effect on the finished product that they can never be regarded as conferring originating status, whether carried out individually or in a combination of processes. Simply put, those operations prevent the acquisition of origin; in the context of cumulation such operations do not confer the origin of the country where they are carried out on goods.

Examples:

1. Raw coffee is imported in bulk into the Community from Colombia. The origin rule for coffee is "manufacture from materials of any heading". In the EC it is dusted, sorted and split up into different packaging. As neither dusting nor splitting up and repackaging are sufficient operations to confer origin, the coffee retains its Colombian origin.

2. Raw coffee is imported in bulk into the Community from Colombia. In the EC it is dusted, roasted, ground, sorted and split up into different packaging. As the operations carried out in the Community are sufficient to confer origin ("manufacture from materials of any heading"), the coffee obtains Community origin.

Explanation:

The first example details a combination of three minimal operations being carried out on the raw coffee. As has already been stated, such operations whether carried out singly or in a combination do not confer origin. Therefore the coffee retains its Colombian origin.

In the second example the coffee has not only been dusted and split up into different packaging, but also has also been significantly processed. Therefore, although some minimal operations have been carried out the more substantial processing must also be considered and it is that processing which, because it fulfils the rule listed in Annex II, results in the end product obtaining Community origin.

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Article 7(1) to the Protocols sets out those processes carried out on non-originating materials which singly or in combination do not confer origin. The list is exhaustive but should be interpreted in the broadest sense. For example, sifting or screening can be carried out on both foodstuffs as well as on industrial products.

Examples:

1. Perfume of Community origin is exported in vats from Austria to the Czech Republic where it is decanted into EC originating bottles and packaged into EC originating packaging. As both operations carried out in the Czech Republic are deemed to be insufficient for conferring Czech origin, the final packaged product will retain its Community origin.

However, in this case another aspect must be considered. If the bottles and/or the packaging are wholly obtained in the Czech Republic or have obtained Czech origin their value would have to be taken into account when determining the origin of the final product.

2. The components of a sewing set having German origin are exported to Poland where they are assembled into sets and put into plastic sleeves and packaged. Neither of the operations carried out in Poland are sufficient to confer Polish origin, therefore the packaged sets retain their Community origin. However, the origin of the plastic sleeve and the packaging may have a bearing on the final origin of the finished product.

Explanation:

It is clear from these examples that neither the perfume nor the components for the sets have undergone any working or processing which has resulted in them being changed in any way.

The perfume remains perfume. The components of the set have only been assembled into sets and have not been changed in any way. However, the value of the local input into the final product in both instances must also be considered due to the containers and packaging being manufactured in the partner country. Whilst the operation of filling bottles or packaging alone will not confer origin the other elements must be considered in order to have a balanced view of the production costs of the overall final product.


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Article 8

Unit of qualification

1. The unit of qualification for the application of the provisions of this Protocol shall be

the particular product which is considered as the basic unit when determining

classification using the nomenclature of the Harmonized System.

It follows that:

(a) when a product composed of a group or assembly of articles is classified under

the terms of the Harmonized System in a single heading, the whole constitutes

the unit of qualification;

(b) when a consignment consists of a number of identical products classified under

the same heading of the Harmonized System, each product must be taken

individually when applying the provisions of this Protocol.

2. Where, under General Rule 5 of the Harmonized System, packaging is included with

the product for classification purposes, it shall be included for the purposes of

determining origin.

COMMENTS:

The first thing that must be referred to here is the importance of having the correct tariff

classification of the product or products being exported. An explanation of tariff

classification is to be found in the reply to Question No. 6 in Part 1 of this Handbook.

If you have doubts or are unable to determine the appropriate tariff classification of your

goods you are advised to contact your local customs office or other appropriate body who

will be able to assist you.

Article 8 lays down the rule for determining the unit of qualification to be used on

documentation. The reference point in this matter is the Harmonized System. Therefore

if an item is composed of a number of components that are classified as a unit in the HS

then that is the unit to be used in determining and claiming preference. Sets fall into this

category.

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If a product is comprised of two or more components but is regarded as a single item in

the HS then for the purposes of the Origin Protocols it shall be also regarded as a single

item.

If a consignment is made up of a number of identical or similar items then each

individual item is to be taken into account when applying the provisions of the Protocols.

When packaging is included with the product for classification, it must be included also

for the determination of origin.

An example of how the unit of qualification is applied is set out below.

Example:

1. HS heading 9605 covers various kinds of travel sets for personal use. When

determining the origin rule to be applied to such travel sets it will be the rule

applicable to heading 9605 not the rule applicable to each individual

component.


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Article 9

Accessories, spare parts and tools

Accessories, spare parts and tools dispatched with a piece of equipment, machine,

apparatus or vehicle, which are part of the normal equipment and included in the price

thereof or which are not separately invoiced, shall be regarded as one with the piece of

equipment, machine, apparatus or vehicle in question.

COMMENTS:

Quite often machinery and equipment are exported with accessories, spare parts or tools required for its maintenance. In cases where such accessories, etc, are part of the normal equipment and are included in the price or are not separately invoiced, they shall be considered as part of the consignment and therefore no account will be taken of them in their own right.


55

Article 10

Sets

Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as

originating when all component products are originating. Nevertheless, when a set is

composed of originating and non-originating products, the set as a whole shall be regarded

as originating, provided that the value of the non-originating products does not exceed

15 per cent of the ex-works price of the set.

EXPLANATORY NOTE:

Article 10 - Origin rule for sets The origin rule for sets applies only to sets within the meaning of General Rule 3 for the interpretation of the Harmonised System. According to this provision each product of which the set is composed, with the exception of products the value of which does not exceed 15 per cent of the total value of the set, must fulfil the origin criteria for the heading under which the product would have been classified if it were a separate product and not included in a set regardless of the heading under which the whole set is classified in accordance with the text of the General Rule referred to above. These provisions remain applicable even if the 15 per cent tolerance is used for that product which under the text of the General Rule referred to above determines the classification of the whole set.

COMMENTS:

Sets quite often present unique problems for customs. Besides the tariff classification of sets and determining the essential character of the whole for classification purposes it is also necessary to determine the origin of sets when they are exported.

Apart from the fact that the tariff classification of sets must follow the strict rules set out in the Interpretative Rules to the HS, they also pose problems from the point of view of origin. In determining the origin of sets you must first of all determine the origin of the individual components.

If all the constituent parts are originating the set will also be originating. However sets comprising originating and non-originating constituents may also obtain origin provided that the non-originating elements do not exceed 15% of the ex-works price of the set.

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Example:

A personal grooming set for travellers comprising the following:

plastic comb, small glass mirror nail file nail clippers small scissors razor for use with disposable blades (blades not included) paper board presentation case If all the components have been manufactured in a single country or in a number of countries within the pan-European cumulation zone the final set will have origin.

If, for example, the plastic comb and the razor are manufactured in Hong Kong the value of these non-originating components must be determined in order to make sure it does not exceed 15% of the ex-works price of the set. If the Hong Kong components do not exceed 15% of the ex-works price, the set is considered to be originating.


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Article 11

Neutral elements

In order to determine whether a product originates, it shall not be necessary to determine

the origin of the following which might be used in its manufacture:

(a) energy and fuel;

(b) plant and equipment;

(c) machines and tools;

(d) goods which do not enter and which are not intended to enter into the final

composition of the product.

COMMENTS:

The term "neutral elements" covers those elements that are not an integral part of the finished product. Therefore, no account is taken of the origin of the fuel, machine tools or the energy required to operate them, robots etc, used in its production.

Example:

Steam turbines of HS heading 8406 are manufactured in Poland from originating and non-originating materials. The turbines are manufactured using Japanese plant and machine tools. The rule specifies that in order for steam turbines to obtain preferential origin any non-originating materials must not exceed 40% of the ex-works price of the finished product.

In calculating whether the 40% non-originating materials rule is met, the producer does not need to add a cost element attributable to the Japanese plant and equipment. In fact the cost of plant and equipment to a manufacturer is an overhead and some element of such capital expenditure would find its way into the price for the turbines. It may be included therefore along with profit in the 60% originating element of the costing equation. Note however, that it would never be an originating material element in the costing.


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Title III

Territorial requirements

The next three Articles comprise Title III of the Protocol. They are concerned with

questions of territoriality, direct transport of goods from one place to another and finally

the specific regulations relating to exhibitions.

It is worth noting that while Articles 12 and 13 both concern goods leaving and returning

to the zone there is a distinct difference between them.

- Article 12 deals with the situation where goods leave the territory of the zone,

whether or not for further working or processing, and return to the exporting

country of the zone.

- Article 13 covers cases where goods transported from one party to another party

of the zone transit through the territory of a third country or countries


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Article 12

Principle of territoriality 1. Except as provided for in Article 2(1)(c), Articles 3 and 4 and paragraph 3 of this

Article, the conditions for acquiring originating status set out in Title II must be

fulfilled without interruption in the Community or in Bulgaria.

2. Except as provided for in Articles 3 and 4, where originating goods exported from the

Community or from Bulgaria to another country return, they must be considered as

non-originating, unless it can be demonstrated to the satisfaction of the customs

authorities that:

(a) the returning goods are the same as those exported;

and

(b) they have not undergone any operation beyond that necessary to preserve them

in good condition while in that country or while being exported.

3. The acquisition of originating status in accordance with the conditions set out in Title

II shall not be affected by working or processing done outside the Community or

Bulgaria on materials exported from the Community or from Bulgaria and

subsequently re-imported there, provided:

(a) the said materials are wholly obtained in the Community or in Bulgaria or have

undergone working or processing beyond the operations referred to in Article 7

prior to being exported;

and

(b) it can be demonstrated to the satisfaction of the customs authorities that:

i) the re-imported goods have been obtained by working or processing the

exported materials;

and

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ii) the total added value acquired outside the Community or Bulgaria by

applying the provisions of this Article does not exceed 10 per cent of the ex-

works price of the end product for which originating status is claimed.

4. For the purposes of paragraph 3, the conditions for acquiring originating status set

out in Title II shall not apply to working or processing done outside the Community

or Bulgaria. But where, in the list in Annex II, a rule setting a maximum value for

all the non-originating materials incorporated is applied in determining the

originating status of the end product, the total value of the non-originating materials

incorporated in the territory of the party concerned, taken together with the total

added value acquired outside the Community or Bulgaria by applying the provisions

of this Article, shall not exceed the stated percentage.

5. For the purposes of applying the provisions of paragraphs 3 and 4, 'total added value'

shall be taken to mean all costs arising outside the Community or Bulgaria, including

the value of the materials incorporated there.

6. The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfil

the conditions set out in the list in Annex II or which can be considered sufficiently

worked or processed only if the general tolerance fixed in Article 6(2) is applied.

7. The provisions of paragraphs 3 and 4 shall not apply to products of Chapters 50 to 63

of the Harmonized System

8. Any working or processing of the kind covered by the provisions of this Article and

done outside the Community or Bulgaria shall be done under the outward processing

arrangements, or similar arrangements.

COMMENTS:

In the previous eleven articles all physical aspects of what determines a products origin are discussed. Article 12 turns attention to the geographical restrictions that the origin rules impose.

Articles 2, 3 and 4 list the countries and territories in which the so-called pan-European cumulation system of origin operates and specify the conditions under which goods may have preferential origin within the pan-European area.

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Article 12 commences by reaffirming the necessity of complying with the provisions of Articles 2, 3 and 4. One of those provisions requires, with some exceptions, that working or processing must be carried out in the zone. In modern manufacturing practice it is sometimes necessary to send products to another country for special processing which cannot be performed inside the territory of the zone and Article 12 covers such situations.

However, the provisions of this Article apply only to goods exported in such circumstances outside the zone when they return to the exporting country. The provisions will not apply if the exporting country of the zone is different from the importing country of the zone. This is the reason why this extra territorial processing shall be done under outward processing or similar arrangements.

Article 12(1) specifies that the conditions laid down in all the Articles of Title II of the Protocol for the acquisition of origin must be fulfilled.

Article 12(2) addresses the matter of originating goods that leave the territory of the zone and, for whatever reason, are returned. If it can be proved to the satisfaction of customs that the returning goods are the same goods which left the zone, and that during the period they were outside the territory of the zone nothing has been done to them to alter them in anyway, the goods may be considered as originating within the zone on their return. If this cannot be proved then the returned goods will be regarded as non-originating.

Article 12(3) points out that despite the preceding paragraph (2) there are exceptional circumstances where working or processing can be carried out outside the pan-European cumulation zone without the final product losing its originating status. Those conditions are

a) that the goods exported for working or processing outside the zone are originating within the zone;

b) it has to be shown that the reimported goods are the result of working or processing carried out in the third country on the previously exported materials;

c) the total added value acquired outside the pan-European cumulation zone does not exceed 10% of the ex-works price of the product for which preference is being sought.

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If any of the above conditions cannot be complied with the returning goods will be treated as non-originating.

The provisions of this Article do not apply to textile products of Chapters 50 to 63 inclusive.

If the final product obtains originating status by virtue of applying the 10% tolerance rule under Article 6(2), the tolerance permitted under this Article cannot be applied. Both tolerance rules cannot be applied together when determining the origin of the final product.

When determining the origin of the final product, working or processing performed outside the territory of the contracting parties generally should not be taken into account. Nevertheless, the value- added rule in Annex II applies to the final product and the total value of the working or processing done outside the territory of the contracting parties must be taken together with the value of the non-originating materials incorporated in the territory of the contracting parties.

The combined values (the value added outside the territory and the value of the non-originating materials) should not exceed the percentages stated in the list rule set out in Annex II.


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Article 13

Direct transport

1. The preferential treatment provided for under the Agreement applies only to products,

satisfying the requirements of this Protocol, which are transported directly between

the Community and Bulgaria or through the territories of the other countries referred

to in Articles 3 and 4. However, products constituting one single consignment may be

transported through other territories with, should the occasion arise, trans-shipment

or temporary warehousing in such territories, provided that they remain under the

surveillance of the customs authorities in the country of transit or warehousing and

do not undergo operations other than unloading, reloading or any operation designed

to preserve them in good condition.

Originating products may be transported by pipeline across territory other than that

of the Community or Bulgaria.

2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be

supplied to the customs authorities of the importing country by the production of:

(a) a single transport document covering the passage from the exporting country

through the country of transit; or

(b) a certificate issued by the customs authorities of the country of transit:

(i) giving an exact description of the products;

(ii) stating the dates of unloading and reloading of the products and, where

applicable, the names of the ships, or the other means of transport used;

and

(iii) certifying the conditions under which the products remained in the

transit country; or

(c) failing these, any substantiating documents.

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COMMENTS:

The purpose of Article 13 is to ensure that when goods are being transported between contracting partners they are subject to customs control, even if transportation necessitates leaving the territory of the pan-European cumulation zone and involves stop-overs along the route.

The reason for the direct transport rule is to ensure that in principle all working or processing is carried out in partner countries of the zone and to prevent goods which are in breach of that condition from benefiting from preferential origin. Article 13 lays down special conditions to cover such situations.

(a) The first concerns direct transportation between neighbouring countries within the zone where they have a common border. Such transportation should not present any control difficulties, as the goods will remain within the borders of the zone.

(b) The second scenario involves indirect transportation between two countries of the zone through the territory of other countries of the zone. This situation should not present any major difficulties either, as the transportation is carried out within the zone.

(c) The third situation involves goods that move between two countries of the zone passing on the way through territory outside the area covered by Article 4. Such journeys may involve passing through more than one country and may require stopovers along the route. In such cases there are strict obligations placed on the exporter that must be complied with and proof of compliance must be provided when requested by customs.

In all the above cases goods may be transported by any means of transport. Furthermore, the situations outlined in (a) and (b) above generally create no difficulties, as consignments will be accompanied by a single transport document. It is the third case, outlined at (c), which can give rise to difficulties.

For cases such as that outlined at (c) the following conditions must be complied with.

a) only single consignments accompanied by appropriate documentation may benefit from this provision.

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b) goods transhipped in this manner must always remain under the surveillance of the customs authorities. The goods may also have to be unloaded and reloaded during the journey and operations for the purpose of maintaining them in good condition may have to be undertaken. Such operations are allowed provided they are carried out under the surveillance of the local customs authorities.

In all cases of transhipment or temporary warehousing in territories outside the zone it is necessary to be able to prove that the consignment that has left the exporting country is the same as that which arrives in the importing country.

The proof required can take any of the three forms outlined in Article 13(2). In the absence of a single transport document (e.g. a through bill of lading) the customs authorities of the countries through which the goods transit must provide documentary proof that the consignment was at all times under their surveillance when on their territory. Such proof must contain the details outlined at Article 13(2). In simple terms such documentary proof must detail the history of the journey of the consignment through their territory and the conditions under which the surveillance has been conducted. This documentary proof is known as a certificate of non-manipulation.

In the absence of either of the foregoing proofs any other substantiating documents can be presented in support of a claim to preference. However it is difficult to envisage any other documents (e.g. commercial documents) that would adequately demonstrate that all the conditions of paragraph 1 of the Article were satisfied.


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Article 14

Exhibitions 1. Originating products, sent for exhibition in a country other than those referred to in

Articles 3 and 4 and sold after the exhibition for importation in the Community or in

Bulgaria shall benefit on importation from the provisions of the Agreement provided

it is shown to the satisfaction of the customs authorities that:

(a) an exporter has consigned these products from the Community or from Bulgaria

to the country in which the exhibition is held and has exhibited them there;

(b) the products have been sold or otherwise disposed of by that exporter to a person

in the Community or in Bulgaria;

(c) the products have been consigned during the exhibition or immediately

thereafter in the state in which they were sent for exhibition;

and

(d) the products have not, since they were consigned for exhibition, been used for

any purpose other than demonstration at the exhibition.

2. A proof of origin must be issued or made out in accordance with the provisions of

Title V and submitted to the customs authorities of the importing country in the

normal manner. The name and address of the exhibition must be indicated thereon.

Where necessary, additional documentary evidence of the conditions under which

they have been exhibited may be required.

3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair

or similar public show or display which is not organised for private purposes in shops

or business premises with a view to the sale of foreign products, and during which the

products remain under customs control.

COMMENTS:

This Article covers originating goods which are purchased at a public exhibition held in a third country. The provisions of this Article do not apply to products purchased at private exhibitions in shops or business premises. It applies solely to the kinds of exhibitions described in Article 14(3).

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In the case of trade, industrial and crafts exhibitions it is important to be able to prove that the goods sent for exhibition have not in any way been altered, processed or differ in any respect from when they left the zone. Another requirement is that the goods have not been used for any purpose other than demonstration at the exhibition and that they are consigned to one of the contracting parties within the zone either during, or immediately, after the exhibition has ended.

Exhibits that are sold during or after an exhibition may benefit from preferential origin provided it can be proved that:

1. they were sent from one of the contracting parties (e.g. Bulgaria) to an exhibition where they were put on show,

2. that the exporter has sold them to a person in another contracting party (e.g. the Community),

3. that they were consigned during or immediately after the exhibition in an unchanged condition, and

4. that they have been used only for demonstration or exhibition purposes since they were consigned for exhibition.

Note that all the conditions of this Article must be fulfilled, otherwise the returning exhibits will be regarded as non-originating goods and will be treated accordingly.

Finally, a proof of origin must be issued or made out in accordance with the provisions of the relevant Articles of Title V of the Protocol. (Please see the explanations for the relevant Articles concerning proofs of origin).


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Title IV

Drawback or exemption

Article 15

Prohibition of drawback of, or exemption from, customs duties

1. (a) Non-originating materials used in the manufacture of products originating in

the Community, in Bulgaria or in one of the other countries referred to in

Articles 3 and 4 for which a proof of origin is issued or made out in accordance

with the provisions of Title V shall not be subject in the Community or in

Bulgaria to drawback of, or exemption from, customs duties of whatever kind.

(b) Products falling within Chapter 3 and headings 1604 and 1605 of the

Harmonized System and originating in the Community as provided for in

Article 2(1)(c), for which a proof of origin is issued or made out in accordance

with the provisions of Title V shall not be subject in the Community to drawback

of, or exemption from, customs duties of whatever kind.

2. The prohibition in paragraph 1 shall apply to any arrangement for refund, remission

or non-payment, partial or complete, of customs duties or charges having an

equivalent effect, applicable in the Community or in Bulgaria to materials used in the

manufacture and to products covered by paragraph 1(b) above, where such refund,

remission or non-payment applies, expressly or in effect, when products obtained

from the said materials are exported and not when they are retained for home use

there.

3. The exporter of products covered by a proof of origin shall be prepared to submit at

any time, upon request from the customs authorities, all appropriate documents

proving that no drawback has been obtained in respect of the non-originating

materials used in the manufacture of the products concerned and that all customs

duties or charges having equivalent effect applicable to such materials have actually

been paid.

4. The provisions of paragraphs 1 to 3 shall also apply in respect of packaging within

the meaning of Article 8(2), accessories, spare parts and tools within the meaning of

Article 9 and products in a set within the meaning of Article 10 when such items are

non-originating.

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5. The provisions of paragraphs 1 to 4 shall apply only in respect of materials which are

of the kind to which the Agreement applies. Furthermore, they shall not preclude the

application of an export refund system for agricultural products, applicable upon

export in accordance with the provisions of the Agreement.

EXPLANATORY NOTE:

Article 15 - Drawback in cases of errors Drawback or remission of duty can only be given in the case that evidence of origin has been wrongly issued or made out if the following three conditions have been met: (a the wrongly issued or made out evidence of origin is returned to the authorities in the

country of export, or, as an alternative, a written statement is made by the authorities in the importing country that no preference has been or will be granted;

(b) the products used in the manufacture would have been entitled to drawback or remission of

duties under the provisions in force if an evidence of origin had not been used to claim preference;

(c) the period allowed for repayment has not been exceeded and the conditions laid down in

the national law of the country concerned governing repayment are met.

COMMENTS:

Before explaining the provisions of this Article it is perhaps necessary to give a brief explanation concerning the term "drawback". When goods arrive in the Community from a third country they may be liable to customs duty at a specific rate. Similarly when Community goods arrive in a partner country they, too, are liable for duties. Before taking delivery of the goods these duties must be paid by the importer or his agent.

‘Drawback’ refers to the waiver or refund of such duties on materials used in the manufacture of a product for exportation.

The intention of this Article is to prevent "drawback" on any non-originating goods used in the working or processing of an originating product. All duties to which the non-originating goods are liable must be paid and at no time waived or refunded and proof to that effect must be made available to the customs when they request it.

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In the case of a proof of origin that has been wrongly issued or made out it is possible to claim drawback on the non-originating products provided the following three conditions are met.

1) the wrongly issued proof of origin is returned to the customs authorities of the exporting country or a written statement that no preference has been, or will be, granted is given by the authorities in the importing country;

2) the non-originating products would have been entitled to drawback if the erroneous proof of origin had not been used to claim preference, and

3) the period allowed for the repayment in the country concerned has not been exceeded and that the relevant conditions laid down in the national law of that country have also been complied with.


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Title V

Proof of origin

Title V of the Protocols comprises 15 Articles. Those Articles describe the kinds of proofs of origin available to traders and set out the procedures to be adopted for issuing those proofs of origin.

If origin can be described as the "economic" nationality of goods, proofs of origin could be compared to their "passports" or "identity cards". Proofs of origin do just that, they prove that the goods they accompany have fulfilled the origin requirements set out in Articles 5 to 7 inclusive as well as the other relevant provisions of the origin rules, in particular the no-drawback rule in Article 15.

There are two kinds of proofs of origin: a movement certificate EUR.1 and an invoice declaration". Either of those documents may be presented to customs in support of a claim for preferential origin. Which document should be used is determined by the criteria set out in this part of the Protocol.


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Article 16

General requirements

1. Products originating in the Community shall, on importation into Bulgaria and

products originating in Bulgaria shall, on importation into the Community benefit

from the Agreement upon submission of either:

(a) a movement certificate EUR.1, a specimen of which appears in Annex III;

or

(b) in the cases specified in Article 21(1), a declaration, subsequently referred to as

the "invoice declaration", given by the exporter on an invoice, a delivery note or

any other commercial document which describes the products concerned in

sufficient detail to enable them to be identified; the text of the invoice

declaration appears in Annex IV.

2. Notwithstanding paragraph 1, originating products within the meaning of this

Protocol shall, in the cases specified in Article 26, benefit from the Agreement

without it being necessary to submit any of the documents referred to above.

EXPLANATORY NOTE:

Article 16 (and 24) - Submission of proof of origin in case of electronic transmission of the import declaration In cases where import declarations are transmitted electronically to the customs authorities of the importing State, it rests with these authorities to decide, within the framework and according to the provisions of the customs legislation applicable in the importing State, when and to what extent the documents constituting evidence of originating status shall actually be submitted.

COMMENTS:

The granting of preferential origin is generally conditional on the presentation of a valid proof of origin. The required proof is either a movement certificate EUR.1 or an invoice declaration. Articles 17 and 21 deal respectively with those forms of proof.

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In the case of small parcels being sent from one person to another or goods in the personal baggage of travellers, they are exempt from the requirement to present a proof of origin under certain circumstances that are discussed at Article 26.

Before setting out to obtain a proof of origin it is necessary to determine the origin of your goods by reference to the preceding Articles. You must determine whether or not they have been wholly obtained or sufficiently worked, whether all required customs duties or equivalent charges have been fully paid, where appropriate, and the correct tariff classification, etc, as described in the preceding Articles of the Protocol.


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Article 17

Procedure for the issue of a movement certificate EUR.1

1. A movement certificate EUR.1 shall be issued by the customs authorities of the

exporting country on application having been made in writing by the exporter or,

under the exporter's responsibility, by his authorised representative.

2. For this purpose, the exporter or his authorised representative shall fill out both the

movement certificate EUR.1 and the application form, specimens of which appear

in Annex III. These forms shall be completed in one of the languages in which this

Agreement is drawn up and in accordance with the provisions of the domestic law

of the exporting country. If they are hand-written, they shall be completed in ink in

printed characters. The description of the products must be given in the box

reserved for this purpose without leaving any blank lines. Where the box is not

completely filled, a horizontal line must be drawn below the last line of the

description, the empty space being crossed through.

3. The exporter applying for the issue of a movement certificate EUR.1 shall be

prepared to submit at any time, at the request of the customs authorities of the

exporting country where the movement certificate EUR.1 is issued, all appropriate

documents proving the originating status of the products concerned as well as the

fulfilment of the other requirements of this Protocol.

4. A movement certificate EUR.1 shall be issued by the customs authorities of a Member

State or of Bulgaria if the products concerned can be considered as products

originating in the Community, in Bulgaria or in one of the other countries referred

to in Articles 3 and 4 and fulfil the other requirements of this Protocol.

5. The customs authorities issuing movement certificates EUR.1 shall take any steps

necessary to verify the originating status of the products and the fulfilment of the

other requirements of this Protocol. For this purpose, they shall have the right to

call for any evidence and to carry out any inspection of the exporter's accounts or

any other check considered appropriate. They shall also ensure that the forms

referred to in paragraph 2 are duly completed. In particular, they shall check

whether the space reserved for the description of the products has been completed in

such a manner as to exclude all possibility of fraudulent additions.

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6. The date of issue of the movement certificate EUR.1 shall be indicated in Box 11 of

the certificate.

7. A movement certificate EUR.1 shall be issued by the customs authorities and made

available to the exporter as soon as actual exportation has been effected or ensured.


EXPLANATORY NOTES

Article 17 - Description of goods on movement certificate EUR.1 Cases of goods originating in two or more countries or territories If the products covered by the movement certificate originate in more than one country or territory: - box 4 (country, group of countries or territory in which the products are considered as

originating) should bear the mention "see box 8'; and, - box 8 (Item number; marks and numbers; number and kind of package; description of the

goods): the name or official abbreviation of every country(Î) concerned shall be indicated for each item in this box.

Cases of large consignments When the box, on the movement certificate EUR.1, provided for the description of the goods is insufficient to permit specification of the necessary particulars for identifying the goods, particularly in the case of large consignments, the exporter may specify the goods to which the certificate relates on attached invoices of the goods and, if necessary, additional commercial documents on condition that: (a) the invoices numbers are shown in Box 10 of the movement certificate EUR.1, (b) the invoices and, where relevant, additional commercial documents are firmly attached to

the certificate prior to presentation to customs, and (c) the customs authorities have stamped the invoice and additional commercial documents,

officially attaching them to the certificates. There applicable, the names or official abbreviations of the countries of origin as outlined in the previous note concerning Box 8 shall be indicated on the invoices and if relevant, any additional commercial document. (Î) The ISO-Alpha -2 and -3 codes for each one of the countries are the following: - Andorra AD AND - Bulgaria BG BGR - Switzerland CH CHE - Czech Republic CZ CZE - Estonia EE EST - Hungary HU HUN

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- Iceland IS ISL - Lithuania LT LTU - Latvia LV LVA - Norway NO NOR - Poland PL POL - Romania RO ROM - Slovenia SI SVN - Slovak Republic SK SVK - San Marino SM SMR - Turkey TR TUR No ISO-Alpha code exists for the Community but: EEC, EC, CEE or CE can be accepted.

Article 17 - Goods exported by a customs clearance agent A customs clearance agent may be allowed to act as the authorised representative of the person who is owner of the goods or has a similar right of disposal over them, even in cases where the person is not situated in the exporting country, as long as the agent is in a position to prove the originating status of the goods.

COMMENTS:

The first thing to be understood about the issuing of an EUR.1 certificate is that before the customs issue it, the exporter, or his agent, has the responsibility to provide the correct information to the customs in the application for the certificate. The amount of information to be provided will depend on the rule that must be satisfied. The required information will include some or all of the following:

- the tariff classification of the goods;

- the working and processing in the pan-European cumulation zone;

- proof of origin of any materials or parts used for which originating status is claimed;

- details of any non-originating materials or parts used in the manufacture of the final product including their tariff classification and customs value;

- proof of payment of the relevant customs duties on non-originating goods used;

- any other substantiating documentation the customs request.

Article 17(2) sets out clearly how the request and certificate should be completed before being presented to the customs for issue. Attention should be paid to the details, i.e. how the different boxes are to be completed, especially that which relates to the description of

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the goods, the use of an ink pen or a ball-point pen and not a pencil or other erasable medium, the use of block or printed lettering instead of joined script, the use of the correct language, etc. Failure to comply with any of these simple rules will invariably cause delays in issuing certificates.

EUR.1 certificates are issued by the customs of the exporting country on official forms. The form is comprised of two sheets and carries an identity number. The first sheet of the form contains the actual certificate and when the customs authorities have duly stamped it, it will be returned to the exporter. The second sheet comprises the application for the certificate and will be retained by the customs authorities of the exporting state together with the annexes submitted with the application.

Once exportation of the goods has taken place or is ensured the exporter will be given the movement certificate by the customs authorities. However, if no certificate has been issued at the time of exportation there are provisions laid down in Article 18 for the retrospective issuing of certificates.

Please note that no words may be erased or over-written on an EUR.1 certificate. Any alterations must be made by the exporter, or his agent, and must be endorsed by the customs authorities.

An agent may act as the authorised representative of the person who is the owner of the goods or the person who has the right of disposal over them even if the person the agent represents is not actually situated in the exporting country. However, the agent is obliged to be in a position to prove the origin of the goods for which preferential origin status is being sought.

QUESTIONS:

1. HOW SHOULD AN APPLICATION FOR A MOVEMENT CERTIFICATE BE COMPLETED?

As stated at the start of the explanation to Article 17, the first thing to be considered when applying for an EUR.1 certificate is whether you have all the necessary information to make the application. The application form is to be found on the second sheet of the EUR I certificate. The customs authorities of the exporting state will retain this part when they stamp the EUR.1.

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Before starting to complete your application please read carefully both the certificate and the application to avoid errors. The following four points should also be taken into consideration:

a. If the application is being made by hand it must be completed with either an ink or ballpoint pen.

b. On the reverse of the second sheet the exporter must specify the reasons why he considers that the goods in question meet the conditions required for the application of preferential arrangements.

c. The exporter must submit the various documents on which the application is based (e.g. copies of previously issued EUR.1 movement certificates, invoices, customs' declarations, manufacturers' declarations etc.).

d. The exporter or a representative authorised by the exporter for the purpose declaration must sign the declaration by hand.


2. HOW SHOULD THE EUR.1 MOVEMENT CERTIFICATE BE COMPLETED?

The advice given in the answer to the previous question is valid here also. However, there are some further remarks, which apply here.

a) The information relating to the goods should include a precise definition of the products in question, so that they can be identified without difficulty.

b) The space reserved for the description of the goods must be completed in such a way that it is impossible to make alterations or subsequent additions. No spaces must be left between the items entered and a horizontal line must be drawn immediately below the last item. Any unused space must be struck through entirely.

c) If there is insufficient space for all the goods in question to be entered, reference should be made to a supplementary document (invoice, detailed list, etc.). The supplementary document must be appended to the certificate.

d) The name of the country, group of countries or territory in which the products are considered as originating must be given on the form ("box 4"). If the territory is the

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European Union, the words "European Community", "EC" or "EC" followed by the name of a Member State (e.g. "EC/Finland") may be given in this section, the result being the same. The Member State mentioned in "box 4" may not necessarily be the country in which the movement certificate is issued (e.g. the country named may be France while the certificate is issued in Germany).

e) The reverse side of the EUR.1 certificate is for official purposes only and is not to be completed by the exporter.


3. HOW SHOULD I INDICATE ORIGIN IF THE GOODS IN MY CONSIGNMENT ORIGINATE IN MORE THAN ONE COUNTRY?

If a consignment consists of goods originating in more than one country enter in "box 4" the phrase "see box 8". In box 8 you must then indicate the name or official abbreviation of the country of origin of each item. The abbreviations are based on the ISO standard and are indicated in the Explanatory Note to Article 17.


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Article 18

Movement certificates EUR.1 issued retrospectively

1. Notwithstanding Article 17(7), a movement certificate EUR.1 may exceptionally be

issued after exportation of the products to which it relates if:

(a) it was not issued at the time of exportation because of errors or involuntary

omissions or special circumstances;

or

(b) it is demonstrated to the satisfaction of the customs authorities that a movement

certificate EUR.1 was issued but was not accepted at importation for technical

reasons.

2. For the implementation of paragraph 1, the exporter must indicate in his application

the place and date of exportation of the products to which the movement certificate

EUR.1 relates, and state the reasons for his request.

3. The customs authorities may issue a movement certificate EUR.1 retrospectively only

after verifying that the information supplied in the exporter's application agrees with

that in the corresponding file.

4. Movement certificates EUR.1 issued retrospectively must be endorsed with one of the

following phrases:

ES "EXPEDIDO A POSTERIORI" DA "UDSTEDT EFTERFØLGENDE" DE "NACHTRÄGLICH AUSGESTELLT" EL "ΕΚ∆ΟΘΕΝ ΕΚ ΤΩΝ ΥΣΤΕΡΩΝ" EN "ISSUED RETROSPECTIVELY" FR "DÉLIVRÉ A POSTERIORI" IT "RILASCIATO A POSTERIORI" NL "AFGEGEVEN A POSTERIORI" PT "EMITIDO A POSTERIORI" FI "ANNETTU JÄLKIKÄTEEN" SV "UTFÄRDAT I EFTERHAND" BG "ИЗДАДЕНО А ПОСТЕРИОРИ".

5. The endorsement referred to in paragraph 4 shall be inserted in the "Remarks" box

of the movement certificate EUR.1.

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EXPLANATORY NOTES:

Article 18 - Technical reasons A movement certificate EUR.1 may be rejected for "technical reasons' because it was not made out in the prescribed manner. These are the cases which may give rise to subsequent presentation of a retrospectively-endorsed certificate and they include, by way of example, the following: - the movement certificate EUR.1 has been made out on a form other than the prescribed one (e.g. no

guilloche background, differs significantly from the model in size or colour, no serial number, not printed in one of the officially prescribed languages),

- one of the mandatory boxes (e.g. Box 4 on the EUR.1) has not been filled in, - the movement certificate EUR.1 has not been stamped and signed (i.e. in Box 11), - the movement certificate EUR.1 is endorsed by a non-authorised authority, - the stamp used is a new one which has not yet been notified, - the movement certificate EUR.1 presented is a copy or photocopy rather than the original, - the entry in Box 2 or 5 refers to a country that does not belong to the Agreement (e.g. Israel or

Cuba). Action to be taken The document should be marked "Document not accepted', stating the reason(s), and then returned to the importer in order to enable him to get a new document issued retrospectively. The customs authorities, however, may keep a photocopy of the rejected document for the purposes of post-clearance verification or if they have grounds for suspecting fraud.

COMMENTS:

As mentioned in the explanation to Article 17 there are occasions when the customs may issue an EUR.1 certificate after exportation. The applicant must satisfy the customs that the reasons for requesting a certificate to be issued after exportation are genuine. The details of the date and place of export must accompany the application for the certificate. Those details must agree with those in the corresponding file of the customs.

EUR.1 certificates may only be issued retrospectively in certain circumstances. One of those circumstances is where the customs of an importing country have rejected the original certificate for "technical reasons". In order to give you an idea of what may be considered technical reasons, here are some examples.

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Examples:

a) One of the boxes which applicants are obliged to complete has not been filled in;

b) the EUR.1 certificate has not been signed or stamped by the customs;

c) the EUR.1 is a copy or a photocopy and not the original;

d) the form on which the EUR1 has been made out on does not conform to the precise specifications laid down in Annex III to the Protocol.

In the case where an EUR.1 is rejected for technical reasons by the customs at importation it should be marked "DOCUMENT NOT ACCEPTED" and the reasons should also be stated. It should then be returned to the importer to allow him to obtain a new retrospectively issued document. The customs of the importing country may decide to keep a photocopy of the rejected document for post-verification purposes.

See also Appendix 3 to this Handbook for the different linguistic versions of the phrase "DOCUMENT NOT ACCEPTED".

Note. A new retrospectively issued certificate may not replace a certificate rejected on grounds of non-compliance with the rules of origin.

Another reason for issuing movement certificates retrospectively relates to "exceptional circumstances". This is a vague term used to describe unforeseen or extraordinary circumstances. It is therefore impossible to detail all such cases but it is up to the customs authorities to decide whether a specific case can be regarded as exceptional.


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Article 19

Issue of a duplicate movement certificate EUR.1

1. In the event of theft, loss or destruction of a movement certificate EUR.1, the exporter

may apply to the customs authorities which issued it for a duplicate made out on the

basis of the export documents in their possession.

2. The duplicate issued in this way must be endorsed with one of the following words:

ES "DUPLICADO" DA "DUPLIKAT" DE "DUPLIKAT" EL "ΑΝΤΙΓΡΑΦΟ" EN "DUPLICATE" FR "DUPLICATA" IT "DUPLICATO" NL "DUPLICAAT" PT "SEGUNDA VIA" FI "KAKSOISKAPPALE" SV "DUPLIKAT" BG "ДУБЛИКАТ".

3. The endorsement referred to in paragraph 2 shall be inserted in the "Remarks" box

of the duplicate movement certificate EUR.1.

4. The duplicate, which must bear the date of issue of the original movement

certificate EUR.1, shall take effect as from that date.

COMMENTS:

In such cases when the original movement certificate EUR1 has been lost or destroyed

trader can request the customs authorities of the exporting state to issue a duplicate

certificate. A duplicate is an exact copy of the original. It must therefore cover the

same goods and must replicate the original certificate in every detail. The period of

validity of the original certificate applies also to the duplicate. A duplicate certificate

must always bear the endorsement "DUPLICATE" in box 7. It must always be borne in

mind that before requesting an EUR.1 certificate from the customs you must be able to

satisfy them that the information you are giving them is correct and can be substantiated.

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See also Appendix 3 to this Handbook for the different linguistic versions of the expression "DUPLICATE".


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Article 20

Issue of movement certificates EUR.1 on the basis of a proof of origin issued or made out previously

When originating products are placed under the control of a customs office in the

Community or in Bulgaria, it shall be possible to replace the original proof of origin by

one or more movement certificates EUR.1 for the purpose of sending all or some of these

products elsewhere within the Community or Bulgaria. The replacement movement

certificate(s) EUR.1 shall be issued by the customs office under whose control the products

are placed.

COMMENTS:

When consignments arrive in a partner country they may be split up into smaller

consignments for clearance at different customs offices within that country. In such cases

replacement movement certificates, issued on the basis of the EUR.1 that accompanied

the original consignment, must accompany each of the smaller consignments. The

provisions of Article 20 permit the issuing of such replacement EUR.1 movement

certificates, however the consignment must be under the control of the customs which

issue the replacements.

This Article applies only when consignments are split and sent elsewhere in the

Community or split and sent to other destinations within the territory of a contracting

partner. If products or part consignments are sent from one contracting party to another a

new certificate must be issued under the provisions of Article 17.


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Article 20a

Accounting segregation

1. Where considerable cost or material difficulties arise in keeping separate stocks of

originating and non-originating materials which are identical and interchangeable,

the customs authorities may, at the written request of those concerned, authorise the

so-called "accounting segregation" method to be used for managing such stocks.

2. This method must be able to ensure that, for a specific reference-period, the number

of products obtained which could be considered as "originating" is the same as that

which would have been obtained if there had been physical segregation of the stocks.

3. The customs authorities may grant such authorisation, subject to any conditions

deemed appropriate.

4. This method is recorded and applied on the basis of the general accounting principles

applicable in the country where the product was manufactured.

5. The beneficiary of this facilitation may issue or apply for proofs of origin, as the case

may be, for the quantity of products which may be considered as originating. At the

request of the customs authorities, the beneficiary shall provide a statement of how

the quantities have been managed.

6. The customs authorities shall monitor the use made of the authorisation and may

withdraw it at any time whenever the beneficiary makes improper use of the

authorisation in any manner whatsoever or fails to fulfil any of the other conditions

laid down in this Protocol.

EXPLANATORY NOTE Article 20(a) — Accounting segregation Conditions for the use of accounting segregation for the management of stocks of materials used in manufacture (referred to in Article 20(a) 1. Authorisation to use accounting segregation for the management of stocks of materials used in manufacture shall be granted to any manufacturer who submits to the customs authorities a written request to this end and who satisfies all the conditions for the grant of the authorisation. 2. The applicant must demonstrate a need to use accounting segregation on the grounds of unreasonable costs or impracticability of holding stocks of materials physically separate according to origin.

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3. The originating and non-originating materials must be of the same kind and commercial quality and possess the same technical and physical characteristics. It must not be possible to distinguish materials one from another for origin purposes once they are incorporated into the finished product. 4. The use of the system of accounting segregation shall not give rise to more products acquiring originating status that would have been the case had the materials used in the manufacture been physically segregated. 5. The accounting system must: maintain a clear distinction between the quantities of originating and non-originating

materials acquired, showing the dates on which those materials were placed in stock and, where necessary, the values of those materials;

show the quantity of: (a) originating and non-originating materials used and, where necessary, the total

value of those materials; (b) finished products manufactured; (c) finished products supplied to all customers, identifying separately, (i) supplies to customers requiring evidence of preferential origin (including

sales to customers requiring evidence other than in the form of a proof of origin), and

(ii) supplies to customers not requiring such evidence; be capable of demonstrating either at the time of manufacture or at the time of issue

of any proof of origin (or other evidence of originating status), that stocks of originating materials were deemed available, according to the accounts, in sufficient quantity to support the declaration of originating status.

6.1 The stock balance to which reference is made in paragraph 5 final indent shall reflect both originating and non-originating materials entered in the accounts. The stock balance shall be debited for all finished products whether or not those products are supplied with a declaration of preferential originating status. 6.2 Where products are supplied without a declaration of preferential origin, the stock balance of non-originating materials only may be debited for as long as a balance of such materials is available to support such action. Where this is not the case, the stock balance of originating materials shall be debited. 6.3 The time at which the determination of origin is made (i.e. time of manufacture or date of issue of proof of origin or other declaration of origin) shall be agreed between the manufacturer and the customs authorities and be recorded in the authorisation granted by the customs authorities. 7. At the time of the application to commence using a system of accounting segregation, the customs authorities shall examine the manufacturer's records to determine opening balances of originating and non-originating materials that may be deemed to be held in stock. 8. The manufacturer must:

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accept full responsibility for the way the authorisation is used and for the

consequences of incorrect origin statements or other misuses of the authorisation; make available to the custom authorities, when requested to do so, all documents,

records and accounts for any relevant period. 9. The customs authorities shall refuse authorisation to a manufacturer who does not offer all the guarantees that the customs authorities deem necessary for the proper functioning of the accounting segregation system. 10. The customs authorities may withdraw an authorisation at any time. They must do so whenever the manufacturer no longer satisfies the conditions or no longer offers the specified guarantees. In this case the authorities shall invalidate the proofs of origin or other documents justifying origin that have been incorrectly issued.

COMMENTS Very often producers now have to source their raw materials from both originating and non-originating sources in order to keep up with consumer requirements. So as to ensure that any duties or similar charges with a customs effect have been paid on the non-originating materials a form of accountancy known as "accounting segregation" may be used provided the producer is authorised to do so by the customs authorities. A trader who applies for an authorisation to use accounting segregation must first of all be able to prove that physical segregation of materials would be either impractical or would involve unreasonable financial costs to him. The primary condition attached to this method of accounting is that it must be evident that, for a given period, the number of originating products would be the same if the originating and non-originating materials or products had been physically separated. In other words, the amount of originating products resulting from the use of originating and non-originating materials or products must be the same, no matter which method of segregation is used. It must also be impossible to distinguish the originating and non-originating materials once they have been incorporated in the finished product. The accounting system must be able to maintain a clear distinction between the quantities of originating and non-originating materials acquired and show the dates they were put in stock. It may be necessary to also indicate the values of the materials, both originating and non-originating. It must also be possible to identify the quantities of finished products manufactured by using the originating and non-originating materials as well as the

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quantities of the products supplied to those traders requiring proof of originating status and to those who do not have such requirements. The purpose of this Article is to benefit those producers who are not in a position to physically separate originating and non-originating materials as well as to minimise the financial burden placed on manufacturers that physical segregation would incur. However, only traders who have been authorised by the customs can avail of accounting segregation and the conditions for granting the authorisation will be laid down by the customs. However, the customs also have the right to withdraw an authorisation should the producer no longer satisfy the conditions of his authorisation or no longer offers the guarantees specified in it. The customs will also invalidate any proofs of origin incorrectly issued as a result of the incorrect application of accounting segregation. (RETURN TO CONTENTS)

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Article 21

Conditions for making out an invoice declaration

1. An invoice declaration as referred to in Article 16(1)(b) may be made out:

(a) by an approved exporter within the meaning of Article 22,

or

(b) by any exporter for any consignment consisting of one or more packages

containing originating products whose total value does not exceed EUR 6,000.

2. An invoice declaration may be made out if the products concerned can be considered

as products originating in the Community, in Bulgaria or in one of the other

countries referred to in Articles 3 and 4 and fulfil the other requirements of this

Protocol.

3. The exporter making out an invoice declaration shall be prepared to submit at any

time, at the request of the customs authorities of the exporting country, all

appropriate documents proving the originating status of the products concerned as

well as the fulfilment of the other requirements of this Protocol.

4. An invoice declaration shall be made out by the exporter by typing, stamping or

printing on the invoice, the delivery note or another commercial document, the

declaration, the text of which appears in Annex IV, using one of the linguistic

versions set out in that Annex and in accordance with the provisions of the domestic

law of the exporting country. If the declaration is hand-written, it shall be written in

ink in printed characters.

5. Invoice declarations shall bear the original signature of the exporter in manuscript.

However, an approved exporter within the meaning of Article 22 shall not be required

to sign such declarations provided that he gives the customs authorities of the

exporting country a written undertaking that he accepts full responsibility for any

invoice declaration which identifies him as if it had been signed in manuscript by

him.

6. An invoice declaration may be made out by the exporter when the products to which it

relates are exported, or after exportation on condition that it is presented in the

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importing country no longer than two years after the importation of the products to

which it relates.

EXPLANATORY NOTE:

Article 21 - Practical application of the provisions concerning invoice declaration The following guidelines shall apply:

(a) the wording of the invoice declaration shall be in conformity with the wording set out in Annex IV to the Protocol.

If the products covered by the invoice declaration originate in more than one country or territory, an indication of the names or official abbreviations of all the countries concerned(Î) or a reference to a specific indication in the invoice, must be entered in the wording of the invoice declaration.

In the invoice or equivalent, the name or official abbreviation of every country shall be indicated for each item on the invoice;

(b) the indication of non-originating products and therefore products which are not covered by the invoice declaration should not be made on the declaration itself. However, this indication should appear on the invoice in a precise way so as to avoid any misunderstandings;

(c) declarations made on photocopied invoices are acceptable provided such declarations bear the signature of the exporter under the same conditions as the original. Approved exporters who are authorised not to sign invoice declarations are not required to sign invoice declarations made on photocopied invoices;

(d) an invoice declaration on the reverse of the invoice is acceptable;

(e) the invoice declaration may be made on a separate sheet of the invoice provided that the sheet is obviously part of the invoice. A complementary form may not be used;

(f) an invoice declaration made out on a label which is subsequently attached to the invoice is acceptable provided there is no doubt that the label has been affixed by the exporter. For example, the exporter's stamp or signature should cover both the label and the invoice.

(Î) The ISO-Alpha -2 and -3 codes for each one of the countries are the following: - Andorra AD AND - Bulgaria BG BGR - Switzerland CH CHE - Czech Republic CZ CZE - Estonia EE EST - Hungary HU HUN - Iceland IS ISL - Lithuania LT LTU - Latvia LV LVA - Norway NO NOR - Poland PL POL

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- Romania RO ROM - Slovenia SI SVN - Slovak Republic SK SVK - San Marino SM SMR - Turkey TR TUR No ISO-Alpha code exists for the Community but: EEC, EC, CEE or CE can be accepted.

Article 21 - Value basis for the issue and acceptance of invoice declarations made out by any exporter The ex-works price may be used as the value basis for deciding when an invoice declaration can be used instead of a movement certificate EUR.1 in reference to the value limit laid down in Article 21(1)(b). If the ex-works price is used as the value basis, the importing country shall accept invoice declarations made out by reference to that. In cases where there is no ex-works price owing to the fact that the consignment is supplied free of charge, the customs value established by the authorities of the country of importation shall be considered as the basis for the value limit.

COMMENTS:

Even though all consignments claiming preferential treatment must be accompanied by a proof of origin, it is possible to have a proof of origin other than an EUR.1. in certain circumstances.

As an alternative to having an EUR.1 certificate issued for every consignment an invoice declaration can be made out either by (1) an approved exporter for any consignment, regardless of its value, or (2) by any exporter for consignments, the total value of which does not exceed 6,000 euros. In determining the value of consignments for the purposes of making an invoice declaration, reference should be made to the "ex-works price" as defined in Article 1(f) and to the Explanatory Note to that Article.

The purpose of this Article is to simplify the procedure for manufacturers who regularly export their produce to partner countries within the zone by not requiring them to have to apply to the customs authorities for an EUR.1 for each consignment. However, before being allowed to issue invoice declarations the approved exporter must satisfy certain rules and conditions laid down by the customs authorities of his country. Article 22 deals with that aspect of the system.

Whether or not a consignment can benefit from the concession for consignments of 6,000 euros or less will be determined by reference to the currency in which the invoice is

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drawn up. When the invoice is drawn up in a currency other than the euro the exchange rate for that currency shall serve as the reference point for determining whether or not the consignment qualifies for the concession. Please refer to the explanation to Article 30 given in this Handbook.

With regard to the invoice declaration itself, the text approved exporters must use is the following:

The exporter of the products covered by this document (customs authorisation No..) declares that, except where otherwise clearly indicated, these products are of.. preferential origin.

In Annex IV to each Protocol the above text is reproduced in all Community working languages as well as the language of the country party to that Protocol. However in Appendix 3 to this Handbook you will find the text in all the working languages of the Community and all the official languages of the partner countries operating the pan-European cumulation system of origin.

The text must be in any one of the working languages of the Community or any one of the other languages indicated in the Agreement of your trading partner. Therefore, please always check Annex IV of the Protocol to the relevant agreement in order to verify which languages are valid.

Another obligation of an exporter making out invoice declarations is to provide the customs of the exporting country, when asked to do so, with all the supporting documentation proving the origin he has declared to be true. As in all cases concerning origin, the customs must be able to satisfy themselves that the declared origin is in fact correct.

The declaration itself has to be made out in the manner laid down in Article 21(4). Failure to do so will lead to difficulties and very likely non-acceptance of the declaration.

QUESTION:

1. HOW SHOULD AN INVOICE DECLARATION BE COMPLETED?

When completing an invoice declaration the following points should be borne in mind:

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a) The wording of the declaration must conform to the wording set out in Annex IV to the Protocol.

b) For consignments comprising goods originating in more than one country of the pan-European cumulation zone, the names or official abbreviations of the countries concerned, or a reference to a specific indication in the invoice must be entered in the wording of the invoice declaration. (See the answer to Question 3 in the explanation to Article 17 and the Explanatory Note to the same Article for a list of the abbreviations.)

c) The name or official abbreviation for every country concerned should be entered on the invoice for each item listed.

d) Declarations may be made on photocopies of invoices provided they bear the signature of the exporter, just as required on the original invoices. Approved exporters who are authorised not to sign original invoice declarations need not sign such declarations made on photocopied invoices.

e) An invoice declaration may be made out on the reverse side of an invoice.

f) An invoice declaration may be made on a separate sheet of the invoice provided that the sheet is obviously part of the invoice.

g) If an importer makes out the invoice declaration on a label that is subsequently attached to the invoice there should be no doubt that the label has been affixed by the exporter and his stamp or signature should cover both the label and the invoice.

h) An invoice declaration given on a delivery note or other commercial document must identify the exporter.


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Article 22

Approved exporter

1. The customs authorities of the exporting country may authorize any exporter, hereinafter referred to as "approved exporter", who makes frequent shipments of products under this Agreement to make out invoice declarations irrespective of the value of the products concerned. An exporter seeking such authorization must offer to the satisfaction of the customs authorities all guarantees necessary to verify the originating status of the products as well as the fulfilment of the other requirements of this Protocol.

2. The customs authorities may grant the status of approved exporter subject to any

conditions which they consider appropriate. 3. The customs authorities shall grant to the approved exporter a customs

authorization number which shall appear on the invoice declaration. 4. The customs authorities shall monitor the use of the authorization by the approved

exporter. 5. The customs authorities may withdraw the authorization at any time. They shall do

so where the approved exporter no longer offers the guarantees referred to in paragraph 1, does not fulfil the conditions referred to in paragraph 2 or otherwise makes an incorrect use of the authorization.

EXPLANATORY NOTE:

Article 22 - Approved exporter The term "exporter' may refer to persons or undertakings, regardless of whether they are producers or traders, as long as they comply with all the other provisions of this Protocol. Customs clearance agents may not be granted approved exporter status within the meaning of this Protocol. The status of approved exporter may be granted only after an exporter has submitted a written application. When examining this, the customs authorities should give particular consideration to the following points: - whether the exporter exports regularly: here, rather than focusing on a given number of

consignments or a particular sum, the customs authorities should look into how regularly the operator carries out such operations,

- whether the exporter is at all times in a position to supply evidence of origin for the goods

to be exported. In this connection it is necessary to consider whether the exporter knows the current rules of origin and is in possession of all the documents proving origin. In the case of producers, the authorities must make sure that the undertaking's stock accounts allow identification of the origin of goods and, in the case of new undertakings, that the system they have installed will permit such identification. For operators who are traders only, examination should focus more specifically on their usual trade flows,

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- whether, in the light of his past exporting record, the exporter offers sufficient guarantees concerning the originating status of the goods and the ability to meet all resulting obligations.

Once an authorisation has been issued, exporters must: - undertake to issue invoice declarations only for goods for which they hold all the necessary

proof or accounting elements at the time of issue, - assume full responsibility for the way the authorization is used, particularly for incorrect

origin statements or other misuse of the authorisation, - assume responsibility for ensuring the person in the undertaking responsible for completing

invoice declarations knows and understands the rules of origin, - undertake to keep all documentary proofs of origin for a period of at least three years from

the date that the declaration was made, - undertake to produce proof of origin to the customs authorities at any time, and allow

inspections by those authorities at any time. The customs authorities must carry out regular controls on authorised exporters. These controls must ensure the continued compliance of the use of the authorisation and may be carried out at intervals determined, if possible, on the basis of risk analysis criteria. The customs authorities must notify the Commission of the European Communities of the national numbering system used for designating authorised exporters. The Commission of the European Communities will then pass on the information to the customs authorities of the other countries.

COMMENTS:

An exporter is deemed to be the person or undertaking who either owns the goods or has the legal right to dispose of them. An exporter does not necessarily have to be the producer of the goods.

An approved exporter is an exporter who has met with certain conditions imposed by the customs authorities and has thus been granted certain rights, by those customs authorities, with regard to the proofs of origin he presents. In order to obtain that status an exporter must submit a written application to the customs authorities in accordance with national legislation.

An approved exporter will only obtain that status when he has satisfied the customs authorities of his suitability. In order to determine whether or not he is suitable, the customs may lay down whatever conditions they see fit and the exporter must comply with them. He must also give certain undertakings as required in paragraph 1 of this

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Article. Please remember that the conditions imposed in one partner country may differ from those imposed in another.

When an exporter has been approved by the customs they will grant him an authorisation number which he must quote on the invoice declaration. For their part the customs authorities of the partner countries are obliged to inform the European Commission of their national numbering systems used for designating approved exporters. The Commission in its turn will convey that information to all the other partner countries.

Furthermore, the customs are obliged to monitor the use of the authorisation and should the approved exporter be found to have abused or misused his authorisation the customs are entitled to withdraw it.

Another reason for withdrawing the authorisation is the inability of the exporter to offer the guarantees required in paragraph 1 of this Article.

QUESTION:

1. WHAT ARE THE OBLIGATIONS INCUMBENT ON AN APPROVED EXPORTER?

An approved exporter must have satisfied the customs authorities of his suitability before being granted that status. However, in order to retain approved exporter status the trader must undertake to fulfil the following conditions and obligations.

a) An approved exporter must undertake to issue invoice declarations only for goods for which he has all the necessary proof of origin or accounting elements at the time of issue.

b) He must assume full responsibility for the use the authorisation is put to, including any misuse.

c) The approved exporter must ensure that the person responsible for completing the invoice declaration in the undertaking knows and understands the rules of origin.

d) The exporter must agree to retain the documentary proofs of origin for a period of at least 3 years from the date when the relevant declaration was made.

e) When asked to do so by the customs, an approved exporter must agree to produce a proof of origin at any time and to allow inspections by the customs authorities.

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2. HOW CAN AN EXPORTER OBTAIN "APPROVED EXPORTER" STATUS?

An exporter who wishes to obtain "approved exporter" status must submit a written application to the customs. The customs have the obligation under this Article to satisfy themselves that an exporter is suitable before granting "approved exporter" status. Amongst the criteria to determine suitability are the following:

a) The exporter must be regularly exporting the types of goods for which the authorisation is being sought and must have a good record with regard to previous exports.

b) The applicant exporter must be able to offer sufficient guarantees concerning the originating status of the goods and be able to meet any resulting obligations.

c) In the light of his record of previous exportations, the applicant must be in a position to supply evidence of the origin of the goods being exported.

d) In the case of an exporter who is also a producer, the authorities must be satisfied that the undertaking's stock accounts allow the identification of the origin of the goods.

e) In the case of trader/exporters, the authorities will examine the usual trade flows to verify if they merit the granting of approved exporter status.


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Article 23

Validity of proof of origin

1. A proof of origin shall be valid for four months from the date of issue in the

exporting country, and must be submitted within the said period to the customs

authorities of the importing country.

2. Proofs of origin which are submitted to the customs authorities of the importing

country after the final date for presentation specified in paragraph 1 may be accepted

for the purpose of applying preferential treatment, where the failure to submit these

documents by the final date set is due to exceptional circumstances.

3. In other cases of belated presentation, the customs authorities of the importing

country may accept the proofs of origin where the products have been submitted

before the said final date.

COMMENTS:

Documentary proofs of origin have a life span of four months and can be either an EUR.1 certificate or an invoice declaration. That life begins on the day they are issued or made out and they should be presented to the customs within that 4-month life span.

However, Article 23 allows the customs authorities of the importing country to accept a proof of origin after the expiry of its period of validity in certain circumstances.

They may accept an out of time proof of origin where the circumstances of its belated presentation are deemed exceptional (paragraph 2). Exceptional circumstances in this context means:

Circumstances which are outside the control of the importer or his representative, which occur rarely and which do not compromise the ability of the importing customs authorities to verify the origin of the goods.

An out of time proof of origin may also be accepted where the products have been submitted to the customs of the importing country before the expiry of the document (paragraph 3). Submitted in this context means that the importer has indicated to customs that the goods are preference goods.

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The period of validity rule is part of the control procedures that ensure that only goods satisfying the rules of origin receive preferential tariff treatment. It is important that if questions are to be raised about the true origin of the goods those enquiries are made early. The rule therefore imposes a discipline on importers to present the proof of origin within four months of the date on which it was issued to help meet this control need. Acceptance of an out of time proof of origin is at the discretion of the customs of the importing country. This discretion is not unlimited and will be exercised with due regard to this control requirement.


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Article 24

Submission of proof of origin

Proofs of origin shall be submitted to the customs authorities of the importing country in

accordance with the procedures applicable in that country. The said authorities may

require a translation of a proof of origin and may also require the import declaration to be

accompanied by a statement from the importer to the effect that the products meet the

conditions required for the implementation of the Agreement.

EXPLANATORY NOTE:

Article 16 (and 24) - Submission of proof of origin in case of electronic transmission of the import declaration In cases where import declarations are transmitted electronically to the customs authorities of the importing State, it rests with these authorities to decide, within the framework and according to the provisions of the customs legislation applicable in the importing State, when and to what extent the documents constituting evidence of originating status shall actually be submitted.

COMMENTS:

This Article grants the customs authorities of the importing country the right to request translations of proofs of origin from the importer. The method of presenting the proofs of origin is determined by the procedures of the importing country. In the case of approved exporters who are not required to provide a signature, it is not necessary to present the original invoice containing the invoice declaration.


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Article 25

Importation by instalments

Where, at the request of the importer and on the conditions laid down by the customs

authorities of the importing country, dismantled or non-assembled products within the

meaning of General Rule 2(a) of the Harmonized System falling within Sections XVI

and XVII or headings 7308 and 9406 of the Harmonized System are imported by

instalments, a single proof of origin for such products shall be submitted to the customs

authorities upon importation of the first instalment.

EXPLANATORY NOTE:

Article 25 - Importation by instalments An importer wishing to take advantage of the provisions of this article must inform the exporter before the first instalment is exported that a single proof of origin for the complete product is required. It is possible that each instalment is made up only of originating products. Where such instalments are accompanied by proofs of origin those separate proofs of origin shall be accepted by the customs authorities of the importing country for the instalments concerned, instead of a single proof of origin issued for the complete product.

COMMENTS:

Article 25 gives importers the right to request permission from the customs authorities to import certain large items in instalments. The separate consignments are then covered by a single proof of origin that must be presented with the importation of the first instalment. This simplifies procedures by eliminating the necessity of applying for a proof of origin for each instalment.

This provision mainly covers plant and equipment, which by its very nature would be difficult to ship in one single instalment. The customs authorities of the importing country have the right either to agree to the request, subject to whatever conditions they deem necessary to impose, or to reject it. If they agree the importer will be required to present only one proof of origin, on importation of the first instalment.

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An importer who wishes to import a consignment in instalments must inform the exporter before the first instalment is exported that a single proof of origin for the complete product is required.

If each instalment is made up only of originating products separate proofs of origin will be accepted by the customs of the importing country.


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Article 26

Exemptions from proof of origin

1. Products sent as small packages from private persons to private persons or forming

part of travellers' personal luggage shall be admitted as originating products without

requiring the submission of a proof of origin, provided that such products are not

imported by way of trade and have been declared as meeting the requirements of this

Protocol and where there is no doubt as to the veracity of such a declaration. In the

case of products sent by post, this declaration can be made on the customs

declaration CN22/CN23 or on a sheet of paper annexed to that document.

2. Imports which are occasional and consist solely of products for the personal use of

the recipients or travellers or their families shall not be considered as imports by way

of trade if it is evident from the nature and quantity of the products that no

commercial purpose is in view.

3. Furthermore, the total value of these products shall not exceed EUR 500 in the case

of small packages or EUR 1,200 in the case of products forming part of travellers'

personal luggage.

COMMENTS:

Small consignments sent by post from one private individual to another are permitted to enter a country without a proof of origin. However this concession is limited strictly to small packages which do not exceed 500 euros in value. A similar concession is applied to travellers personal luggage up to 1,200 euros in value. The provisions concerning small packages do not apply to products sent by mail order houses.

The purpose of this concession is to simplify proving the originating status of the relevant goods in the private sector. It can, however, only be applied if

1) those products are not imported by way of trade

2) they have been declared as fulfilling the requirements of the Protocol

3) there is no doubt as to the veracity of the declaration.

All three conditions must be fulfilled.

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The customs authorities of the importing country must be satisfied that such imports are for the personal use of the recipients or their families. The number and nature of such small imports will be assessed in order to determine whether or not they are of a commercial nature.

For further information concerning the euro please refer to the explanation given in relation to Article 30.


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Article 27

Supporting documents

The documents referred to in Articles 17(3) and 21(3) used for the purpose of proving that

products covered by a movement certificate EUR.1 or an invoice declaration can be

considered as products originating in the Community, in or in one of the other countries

referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol may

consist inter alia of the following:

(a) direct evidence of the processes carried out by the exporter or supplier to obtain the

goods concerned, contained for example in his accounts or internal book-keeping;

(b) documents proving the originating status of materials used, issued or made out in the

Community or in Bulgaria where these documents are used in accordance with

domestic law;

(c) documents proving the working or processing of materials in the Community or in

Bulgaria, issued or made out in the Community or in Bulgaria, where these

documents are used in accordance with domestic law;

(d) movement certificates EUR.1 or invoice declarations proving the originating status of

materials used, issued or made out in the Community or in Bulgaria in accordance

with this Protocol, or in one of the other countries referred to in Articles 3 and 4, in

accordance with rules of origin which are identical to the rules in this Protocol.

COMMENTS:

When making a request for an EUR.1 movement certificate or making an invoice declaration the exporter must at all times be prepared to provide the customs with any supplementary information they request. The kind of supplementary documentation concerned should help the customs to confirm the preferential origin status of the goods to which the request for an EUR.1 refers. Examples are outlined in this Article. Therefore, exporters must remember that when requesting the issue of a proof of origin they must also be able to support their request with the correct evidence to prove the information contained in that request is correct.


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Article 28

Preservation of proof of origin and supporting documents

1. The exporter applying for the issue of a movement certificate EUR.1 shall keep for at

least three years the documents referred to in Article 17(3).

2. The exporter making out an invoice declaration shall keep for at least three years a

copy of this invoice declaration as well as the documents referred to in Article 21(3).

3. The customs authorities of the exporting country issuing a movement

certificate EUR.1 shall keep for at least three years the application form referred to in

Article 17(2).

4. The customs authorities of the importing country shall keep for at least three years

the movement certificates EUR.1 and the invoice declarations submitted to them.

COMMENTS:

For whatever reason it may sometimes be necessary to refer back to the documentation that accompanied a consignment on importation. Therefore, for a period of three years, both the exporter and the customs authorities are obliged to retain the documents relating to exports, i.e. the applications for EUR.1 certificates and the certificates themselves, invoice declarations, etc. Even though for trade purposes EUR.1 certificates have a validity period of 4 months, they must nevertheless be retained for three years in case of subsequent verification requests.


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Article 29

Discrepancies and formal errors

1. The discovery of slight discrepancies between the statements made in the proof of

origin and those made in the documents submitted to the customs office for the

purpose of carrying out the formalities for importing the products shall not ipso facto

render the proof of origin null and void if it is duly established that this document

does correspond to the products submitted.

2. Obvious formal errors such as typing errors on a proof of origin should not cause this

document to be rejected if these errors are not such as to create doubts concerning

the correctness of the statements made in this document.

COMMENTS:

This Article covers situations where minor errors appear on proofs of origin or slight discrepancies appear between the statement made in the proof of origin and the documents submitted for importation purposes. In this context “errors” excludes deliberately false information.

Proofs of origin shall not automatically be rejected when they are discovered to contain errors provided the customs of the importing country are satisfied that those proofs of origin relate to, and correspond with, the goods they are presented with. However, it is up to the customs of the importing country to decide whether or not the errors are sufficiently serious to reject proofs of origin.


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Article 30

Amounts expressed in euros

1. For the application of the provisions of Article 21(1)(b) and Article 26(3) in cases where products are invoiced in a currency other than euro, amounts in the national currencies of the Member States of the Community, of Bulgaria and of the other countries referred to in Articles 3 and 4 equivalent to the amounts expressed in euro shall be fixed annually by each of the countries concerned.

2. A consignment shall benefit from the provisions of Article 21(1)(b) or Article 26(3) by

reference to the currency in which the invoice is drawn up, according to the amount fixed by the country concerned.

3. The amounts to be used in any given national currency shall be the equivalent in that

currency of the amounts expressed in euro as at the first working day of October. The amounts shall be communicated to the Commission of the European Communities by 15 October and shall apply from 1 January the following year. The Commission of the European Communities shall notify all countries concerned of the relevant amounts.

4. A country may round up or down the amount resulting from the conversion into its

national currency of an amount expressed in euro. The rounded-off amount may not differ from the amount resulting from the conversion by more than 5 per cent. A country may retain unchanged its national currency equivalent of an amount expressed in euro if, at the time of the annual adjustment provided for in paragraph 3, the conversion of that amount, prior to any rounding-off, results in an increase of less than 15 per cent in the national currency equivalent. The national currency equivalent may be retained unchanged if the conversion would result in a decrease in that equivalent value.

5. The amounts expressed in euro shall be reviewed by the Association Committee at the

request of the Community or of Bulgaria. When carrying out this review, the Association Committee shall consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in euro.

COMMENTS:

Consignments of a certain low value may be covered by a simplified proof of origin. This value is expressed in euros. Article 30 provides a mechanism for converting this value into the currencies of Member States outside the so-called "euro zone" and the national currencies of the partner countries. To provide stability in the application of this trade facilitation measure, the conversion takes place annually and provision is made for a national currency equivalent to be retained under certain circumstances. An exporter judges whether he is entitled to use the simplified procedure for a given consignment by reference to the equivalent of the relevant euro amount in the national

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currency in which he draws up his invoice. It follows therefore that the country of importation must recognise that amount and not convert the value of the consignment into its own currency for the purpose of judging whether the consignment was entitled to use the simplified procedure. (RETURN TO CONTENTS)

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Title VI

Arrangements for administrative co-operation.

For the cumulation system of origin rules put in place by the Protocols to work, a high degree of administrative co-operation between the customs authorities of the countries operating the system is essential. This section of the Protocol concerns the level of co-operation expected between customs authorities when called upon to verify proofs of origin. (RETURN TO CONTENTS)

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Article 31

Mutual assistance

1. The customs authorities of the Member States of the Community and of Bulgaria

shall provide each other, through the Commission of the European Communities,

with specimen impressions of stamps used in their customs offices for the issue of

movement certificates EUR.1 and with the addresses of the customs authorities

responsible for verifying those certificates and invoice declarations.

2. In order to ensure the proper application of this Protocol, the Community and

Bulgaria shall assist each other, through the competent customs administrations, in

checking the authenticity of the movement certificates EUR.1 or the invoice

declarations and the correctness of the information given in these documents.

COMMENTS:

In order to ensure the proper management and smooth running of the pan-European cumulation system of origin rules the customs administrations of the participant countries have agreed to assist and co-operate with each other. Article 31 sets out the obligations of customs administrations of the partner countries in this regard.

One of the obvious areas open to abuse is the issuing of proofs of origin. To reduce opportunities for issuing false documents the contracting parties have agreed to provide each other with impressions of the stamps their authorities use to authenticate proofs of origin.

The competent customs authorities of the contracting partners are also obliged to assist each other in checking the authenticity of EUR.1 certificates and invoice declarations and any information contained in those documents. Verifications are carried out when the customs of the importing country formally request the customs of the exporting country to verify the proofs of origin.


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Article 32

Verification of proofs of origin

1. Subsequent verifications of proofs of origin shall be carried out at random or

whenever the customs authorities of the importing country have reasonable doubts as

to the authenticity of such documents, the originating status of the products

concerned or the fulfilment of the other requirements of this Protocol.

2. For the purposes of implementing the provisions of paragraph 1, the customs

authorities of the importing country shall return the movement certificate EUR.1 and

the invoice, if it has been submitted, the invoice declaration, or a copy of these

documents, to the customs authorities of the exporting country giving, where

appropriate, the reasons for the enquiry. Any documents and information obtained

suggesting that the information given on the proof of origin is incorrect shall be

forwarded in support of the request for verification.

3. The verification shall be carried out by the customs authorities of the exporting

country. For this purpose, they shall have the right to call for any evidence and to

carry out any inspection of the exporter's accounts or any other check considered

appropriate.

4. If the customs authorities of the importing country decide to suspend the granting of

preferential treatment to the products concerned while awaiting the results of the

verification, release of the products shall be offered to the importer subject to any

precautionary measures judged necessary.

5. The customs authorities requesting the verification shall be informed of the results of

this verification as soon as possible. These results must indicate clearly whether the

documents are authentic and whether the products concerned can be considered as

products originating in the Community, in Bulgaria or in one of the other countries

referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol.

6. If in cases of reasonable doubt there is no reply within ten months of the date of the

verification request or if the reply does not contain sufficient information to

determine the authenticity of the document in question or the real origin of the

products, the requesting customs authorities shall, except in exceptional

circumstances, refuse entitlement to the preferences.

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EXPLANATORY NOTES

Article 32 Refusal of preferential treatment without verification This covers cases in which the proof of origin is considered inapplicable, inter alia, for the following reasons: - the goods to which the movement certificate EUR.1 refers are not eligible for preferential

treatment, - the goods description box (Box 8 on EUR.1) is not filled in or refers to goods other than

those presented, - the proof of origin has been issued by a country which does not belong to the preferential

system even if the goods originate in a country belonging to the system (e.g. EUR.1 issued in Israel for products originating in Poland),

- one of the mandatory boxes on the movement certificate EUR.1 bears traces of non-

authenticated erasures or alternations (e.g. the boxes describing the goods or stating the number of packages, the country of destination or the country of origin),

- the time-limit on the movement certificate EUR.1 has expired for reasons other than those

covered by the regulations (e.g. exceptional circumstances), except where the goods were presented before expiry of the time-limit,

- the proof of origin is produced subsequently for goods that were initially imported

fraudulently, - Box 4 on the movement certificate EUR.1 names a country not party to the agreement

under which preferential treatment is being sought. Action to be taken The proof of origin should be marked "Inapplicable' and retained by the customs authorities to which it was presented in order to prevent any further attempt to use it. Where it is appropriate to do so, the Customs authorities of the importing country shall inform the Customs authorities of the country of exportation about the refusal without delay. Article 32 - Time-limits for the verification of evidences of origin No country shall be obliged to answer a request for subsequent verification, as provided for in Article 32, received more than three years after the date of issue of a movement certificate EUR.1 or the date of making out an invoice declaration. Article 32 - Reasonable doubt The following cases, by way of example, come into this category: - the document has not been signed by the exporter (except for declarations on the basis of

invoices or commercial documents drawn up by approved exporters where such a possibility is provided for),

- the movement certificate EUR.1 has not been signed or dated by the issuing authority,

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- the markings on the goods or packaging or the other accompanying documents refer to an

origin other than that given on the movement certificate EUR.1, - the particulars entered on the movement certificate EUR.1 show that there has been

insufficient working to confer origin, - the stamp used to endorse the document does not match that which has been notified. Action to be taken The document is sent to the issuing authorities for post-clearance verification, with a statement of the reasons for the request for verification. Pending the results of this verification, all appropriate steps judged necessary by the customs authorities shall be taken to secure payment of any applicable duties.

COMMENTS:

Following on from the obligation of the customs authorities in the contracting partner countries to assist each other in managing the origin rules, Article 32 sets out the expectations from customs authorities and how they should conduct verifications.

As explained in the comments to the previous Article, the customs authorities of the importing country may request verification of the authenticity of the proofs of origin and of the originating status of the products concerned from the customs authorities of the exporting country. The reasons for such verification requests could stem from doubts about the true origin of the goods or, in the case of goods covered by an EUR1, doubts about the stamp used to authenticate the document. Random verifications are also permitted under this Article.

Pending the results of a verification request, the customs of the importing country may decide to suspend granting preferential tariff treatment in respect of the goods under investigation and to any further consignments of similar goods from the same exporter. However, they will offer to release the goods subject to whatever precautionary measures they deem necessary such as demanding payment from the importer of a deposit equal to the full duty payable on the goods or an undertaking guaranteed by a bank to pay the duty.

If in cases of reasonable doubt a reply to the verification request has not been received within ten months, or does not contain sufficient information to verify that the certificate is authentic or the declared origin is correct, the customs will refuse preference.

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The customs authorities may also refuse preferential origin without requesting verification of the proofs presented. Amongst the reasons for such action are the following examples:

a) the goods to which the proof of origin relates are not eligible for preference;

b) the description box has not been completed;

c) the goods described in the proof of origin do not match those presented;

d) the proof of origin has been presented after the expiry of its period of validity and there are no grounds justifying its acceptance exceptionally;

e) the proof of origin has had words erased or has in some way been tampered with;

f) a country not party to the agreement has been cited in box 4 of the EUR.1 certificate.

The examples quoted above are merely illustrative of the reasons for refusing origin. It is not an exhaustive list.

QUESTION:

WHAT ARE "REASONABLE DOUBTS"?

It is impossible to provide a definitive list of what can be termed "reasonable doubts" as referred to in Article 32(1). However, the following examples may give some idea of what is meant by that term.

a) the invoice declaration may be missing the signature of the exporter;

b) the EUR.1 certificate may not have been signed or dated by the issuing customs authorities;

c) the stamp used to endorse the document may not match the relevant stamp impression notified to the Commission and, via the Commission, to the other partner countries;

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d) the marking on the packing may not match the origin declared on the proof of origin presented.

The authorities of the importing country will send the document to the issuing authorities of the exporting country and attach a statement of the reasons for the verification request. Pending the results of the verification, the customs of the importing country will take all appropriate steps they deem necessary to secure payment of any appropriate duties.


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Article 33

Dispute settlement

Where disputes arise in relation to the verification procedures of Article 32 which cannot

be settled between the customs authorities requesting a verification and the customs

authorities responsible for carrying out this verification or where they raise a question as

to the interpretation of this Protocol, they shall be submitted to the Association Committee.

In all cases the settlement of disputes between the importer and the customs authorities of

the importing country shall be under the legislation of the said country.

EXPLANATION:

Inevitably, in a complex system such as that operating between the Community and its

partners, disputes over interpretation will arise. Where such disputes arise between the

customs of the importing country and those of the exporting country they may be

submitted to the Association Committee or Joint Committee, whichever is appropriate,

for resolution. Disputes over verification procedures may also be submitted to the

Association Committee.


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Article 34

Penalties

Penalties shall be imposed on any person who draws up, or causes to be drawn up, a

document which contains incorrect information for the purpose of obtaining a preferential

treatment for products.

EXPLANATION:

Should an exporter or any other person (e.g. supplier) deliberately provide false documentation as evidence that his goods are entitled to preferential origin, and he is issued with an EUR.1 movement certificate on the basis of that false information, that person leaves himself open to be legally prosecuted and liable to any penalty the courts decide to impose on him.

Once again, exporters are reminded to be absolutely certain of the veracity of the information they present to the customs in support of an application for a movement certificate.


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Article 35

Free zones

1. The Community and Bulgaria shall take all necessary steps to ensure that products

traded under cover of a proof of origin which in the course of transport use a free

zone situated in their territory, are not substituted by other goods and do not undergo

handling other than normal operations designed to prevent their deterioration.

2. By means of an exemption to the provisions contained in paragraph 1, when products

originating in the Community or in Bulgaria are imported into a free zone under

cover of a proof of origin and undergo treatment or processing, the authorities

concerned shall issue a new movement certificate EUR.1 at the exporter's request, if

the treatment or processing undergone is in conformity with the provisions of this

Protocol.

COMMENTS:

Article 35 considers the areas known as "free zones". Free zones are areas where goods may be imported, processed and re-exported free from normal customs controls. Such controls that take place ensure that goods using the free zone are not illegally imported to the national territory.

In the context of pan-European cumulation it may be necessary, during transportation from exporter to importer, that goods which are accompanied by a proof of origin stop over in a free zone. If that is the case the authorities are obliged to ensure that the goods which leave the free zone are the same goods which entered it. Handling deemed necessary for the preservation of the goods in good condition is allowed.

A free zone remains part of the national territory. If goods are sent to a free zone for working or processing the exporter may request the customs authorities to issue a new EUR.1 certificate. If the working or processing in question conforms to the provisions of Protocol 4 and there is compliance with the no drawback rule, where appropriate, the customs authorities may issue a new EUR.1 movement certificate.


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Title VII

Ceuta and Melilla

Title VII comprises two Articles that cover the special situation of the Spanish Autonomous Cities of Ceuta and Melilla.


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Article 36

Application of the Protocol

1. The term "Community" used in Article 2 does not cover Ceuta and Melilla.

2. Products originating in Bulgaria, when imported into Ceuta or Melilla, shall enjoy in

all respects the same customs regime as that which is applied to products originating

in the customs territory of the Community under Protocol 2 of the Act of Accession of

the Kingdom of Spain and the Portuguese Republic to the European Communities.

Bulgaria shall grant to imports of products covered by the Agreement and originating

in Ceuta and Melilla the same customs regime as that which is granted to products

imported from and originating in the Community.

3. For the purpose of the application of paragraph 2 concerning products originating in

Ceuta and Melilla, this Protocol shall apply mutatis mutandis subject to the special

conditions set out in Article 37.

EXPLANATION:

The term" Community" in the context of the pan-European cumulation system of origin does not include the Spanish Autonomous Cities of Ceuta and Melilla. In terms of the Protocols though, products originating in Ceuta and Melilla are regarded as originating in a single territory and are to be accorded the same treatment as goods originating in the Community when imported into a partner country. Similarly, goods originating in a partner country receive preferential treatment when imported into Ceuta and Melilla.

The provisions of this Protocol are to be applied mutatis mutandis for determining the originating status in trade between Ceuta and Melilla on the one hand and the corresponding partner country on the other hand, subject to the special provisions set out in Article 37.


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Article 37

Special conditions

1. Providing they have been transported directly in accordance with the provisions of

Article 13, the following shall be considered as:

(1) products originating in Ceuta and Melilla:

(a) products wholly obtained in Ceuta and Melilla;

(b) products obtained in Ceuta and Melilla in the manufacture of which

products other than those referred to in (a) are used, provided that:

(i) the said products have undergone sufficient working or processing

within the meaning of Article 6;

or that

(ii) those products are originating in Bulgaria or in the Community,

provided that they have been submitted to working or processing which

goes beyond the operations referred to in Article 7.

(2) products originating in Bulgaria:

(a) products wholly obtained in Bulgaria;

(b) products obtained in Bulgaria, in the manufacture of which products other

than those referred to in (a) are used, provided that:

(i) the said products have undergone sufficient working or processing

within the meaning of Article 6;

or that

(ii) those products are originating in Ceuta and Melilla or in the

Community, provided that they have been submitted to working or

processing which goes beyond the operations referred to in Article 7.

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2. Ceuta and Melilla shall be considered as a single territory.

3. The exporter or his authorised representative shall enter "Bulgaria" and "Ceuta and

Melilla" in Box 2 of movement certificates EUR.1 or on invoice declarations. In

addition, in the case of products originating in Ceuta and Melilla, this shall be

indicated in Box 4 of movement certificates EUR.1 or on invoice declarations.

4. The Spanish customs authorities shall be responsible for the application of this

Protocol in Ceuta and Melilla.

COMMENTS:

This Article details the origin criteria that must be fulfilled if goods originating in Ceuta and Melilla are exported to another partner country and vice- versa. Such goods must comply also with the direct transport provisions set out in Article 13. Failure to do so automatically means the goods cannot obtain preferential treatment.

Goods that have been wholly obtained in Ceuta and Melilla are to be regarded as originating there. Goods that are not wholly obtained must be manufactured from

a) non-originating products which have undergone sufficient working or processing as defined in Article 6 or

b) products originating in the EC or the partner country of the relevant agreement provided that those products have been submitted, in Ceuta and Melilla, to working or processing beyond the minimal operations described in Article 7.

The same criteria apply mutatis mutandis to goods exported to Ceuta and Melilla from countries in the pan-European cumulation zone.

Although geographically separated Ceuta and Melilla are regarded as a single territory for the purposes of the Protocol.

When completing EUR.1 movement certificates, "Ceuta and Melilla" and the name of the relevant partner country must be entered in "box 2" and, in the case of goods originating in Ceuta and Melilla this must also be indicated in "box 4".

Although Ceuta and Melilla are autonomous cities the customs authorities of Spain are responsible for the application of the Protocol there.

125


126

Title VIII

Final Provisions

Article 38

Amendments to the Protocol

The Association Council may decide to amend the provisions of this Protocol.

EXPLANATION:

This is the final Article of the Protocol. Appropriately it looks to the future. The preferential origin system in operation between all the countries referred to in Articles 3 and 4 is always progressing and developing. The major developments since the system came into operation in 1997 are the extension of the system to Turkey and the development of diagonal cumulation between all the partners. It is certain that the future will also bring further developments and perhaps other countries may join the system while many of the current partners will become Member States of the Community. Undoubtedly, there will also be amendments to improve the existing provisions and facilitate the better working of the current system. The Association Council will decide upon all such amendments.


127

JOINT DECLARATION CONCERNING THE PRINCIPALITY OF ANDORRA

1. Products originating in the Principality of Andorra falling within Chapters 25 to 97

of the Harmonized System shall be accepted by Bulgaria as originating in the

Community within the meaning of this Agreement.

2. Protocol 4 shall apply mutatis mutandis for the purpose of defining the originating

status of the above-mentioned products.

JOINT DECLARATION CONCERNING THE REPUBLIC OF SAN MARINO

1. Products originating in the Republic of San Marino shall be accepted by Bulgaria as

originating in the Community within the meaning of this Agreement.

2. Protocol 4 shall apply mutatis mutandis for the purpose of defining the originating

status of the above-mentioned products.

EXPLANATION:

Attached to in the Origin Protocol to every agreement you will find two joint declarations, one concerns Andorra and the other San Marino. Both states have Customs Unions with the European Community.

Goods of Chapters 25 to 97 of the HS originating in Andorra may benefit from preferential treatment on importation into the partner country of the relevant agreement under the same conditions as products of EC origin provided, however, that those goods have obtained their origin in accordance with the provisions of the Origin Protocol

Goods originating in the Republic of San Marino may benefit from preferential treatment on importation into the country partner to the relevant agreement under the same conditions as products of EC origin provided, however, that they have obtained their origin in accordance with the provisions of the origin Protocol.


128

APPENDIX 1

This appendix contains a list of the Official Journals of the European Union in which you may find the published Agreement between the Community and each partner country operating the cumulation system of origin concerned by this Handbook. A brief explanation is warrented here in order to clarify the situation with regard to the published protocols. The "pan-European" cumulation system was introduced during 1997. For reasons which need not be discussed here the system entered into force on different dates for some countries. Since it was introduced, a number of amendments to the protocols have also been introduced. One of the principal changes was the integration of Turkey into the system with effect from 1 January 1999. The there were also amendments which came into effect of the first day of 2000 and 2001. The details of the Official Journals where they were published are attached in lists 2 to 4 (inclusive) on the following pages. The Commission is currently publishing consolidated versions of the protocols and all the subsequent amendments. Some consolidated protocols have already been published at the time of the publication of this Handbook and they too are listed with links to the webpage where they can be found. That list will be continuously updated as further consolidated protocols are published. (RETURN TO CONTENTS) (RETURN TO QUESTION 15)

129

LIST 1: Origin Protocols between the Community and other European countries Origin Protocol

between the EC and

PROTOCOLS Decisions and Dates of Entry into Force

Official Journals(L Series)

where published

E.E.A.

Decision No. 71/96 of the Joint Committee of 22 November 1996 (entered into force on 1 January 1997)

No. L21 of 23 January 1997

Iceland

Decision No. 1/96 of the Joint Committee of 19 December 1996 (entered into force on 1 January 1997)

No. L195 of 23 July 1997

Norway


No. L195 of 23 July 1997

Switzerland


No. L195 of 23 July 1997

Bulgaria Decision No. 1/97 of the Association Council of 6 May 1997 (retroactively entered into force on 1 January 1997)

No. L134 of 24 May 1997

Czech Republic

Decision No. 3/96 of the Association Council of 29 November 1996 (entered into force on 1 January 1997)

No. L343 of 31 December 1996

Hungary Decision No. 3/96 of the Association Council of 28 December 1996 (entered into force on 1 July 1997)

No. L92 of 7 April 1997

Poland Decision No. 1/97 of the Joint Committee of 25 February 1997 (entered into force on 1 July 1997)

No. L 221 of 11 August 1997

Romania Decision No. 1/97 of the Association Council of 31 January 1997 (entered into force on 31 January 1997)

No. L54 of 24 February 1997

130

Slovak Republic

Decision No. 3/96 of the Association Council of 9 January 1997 (entered into force on 1 January 1997)

No. L212 of 5 August 1997

Slovenia1

Decision of the Council and the Commission of 21 December 1998 on the conclusion of the Europe Agreement establishing an association between the European the Republic of Slovenia (Protocol No. 4)

No. L 51 of 26 February 1999

Estonia Decision No. 1/97 of the Joint Committee of 6 March 1997 (entered into force on 1 April 1997)


Latvia

Decision No. 1/97 of the Joint Committee of 20 March 1997 (entered into force on 1 April 1997)


Lithuania Decision No. 1/97 of the Joint Committee of 25 February 1997 (entered into force on 1 April 1997)

No. L 136 of 27 May 1997

1 The Europe Agreement Between the EU and Slovenia entered into force on 1 January 1999. The Origin Protocol to that Agreement as published in the Official Journal of the European Communities contains the amendments already consolidated into the text. Prior to 1 January 1999 the Interim Agreement (published in OJ No. L344 of 31 December 1996) applied and Slovenia applied the same origin rules as the other partner countries.

131

LIST 2 Origin Protocol

between the EC and

AMENDMENTS applicable from 1.1.1999


where published

E.E.A.

Decision No. 45/99 of the Joint Committee of 26 March 1999

No. L266 of 19 October 2000

Iceland

Not published yet

Norway

Not published yet

Switzerland

Decision No. 1/99 of the Joint Committee of 24 June 1999

No. L249 of 22 September 1999

Bulgaria Decision No. 1/99 of the Association Council of 28 January 1999


Czech Republic

Decision No. 6/98 of the Association Council of 21 December 1998


Hungary Decision No. 1/99 of the Association Council of 28 January 1999


Poland Decision No. 1/99 of the Joint Committee of 25 January 1999

No. L77 of 23 March 1999

Romania Decision No. 4/98 of the Association Council of 21 December 1998


Slovak Republic

Decision No. 2/99 of the Association Council of 12 May 1999

No. L 143 of 8 June 1999

Slovenia2

Decision of the Council and the Commission of 21 December 1998 on the conclusion of the Europe Agreement establishing an association between the European the Republic of Slovenia (Protocol No. 4)


2 The Europe Agreement Between the EU and Slovenia entered into force on 1 January 1999. The Origin Protocol to that Agreement as published in the Official Journal of the European Communities contains the amendments already consolidated into the text.

132

Estonia Decision No. 1/2001 of the Association

Council of 24 January 2001

No. L 96 of 6 April 2001

Latvia

Decision No.2/99 of the Association Council of 8 December 1999

No. L 5 of 8 January 2000

Lithuania Decision No. 1/99 of the Joint Committee of 27 January 1999


133


between the EC and



where published E.E.A.

Decision No. 188/99 of the Joint Committeeof 17 December 1999

No. L74 of 15 March 2001

Iceland

Not published yet

Norway

Not published yet

Switzerland

Decision No. 2/99 of the Joint Committee of 29 November 1999

No. L323 of 15 December 1999

Bulgaria Decision No. 5/99 of the Association Council of 20 December 1999


Czech Republic



Hungary Decision No. 4/99 of the Association Council of 16 December 1999


Poland Decision No. 5/99 of the Association Council of 17 December 1999

No L 29 of 4 February 2000

Romania Decision No. 5/99 of the Association Council of 20 December 1999


Slovak Republic



Slovenia



Estonia Decision No. 2/2001 of the Association Council of 24 January 2001

No. L 73 of 15 March 2001

Latvia



Lithuania Decision No. 6/99 of the Joint Committee of 23 December 1999


134


between the EC and




Decision No. 114/2000 of the Joint Committee of 22 December 2000


Iceland

Not published yet

Norway

Not published yet

Switzerland

Decision No. 1/2001 of the Joint Committeeof 24 January 2001


Bulgaria Decision No. 1/2001 of the Association Council of 26 March 2001

No. 127 of 9 May 2001

Czech Republic

Decision No. 2/2001 of the Association Council of 23 January 2001


Hungary Decision No. 4/2000 of the Association Council of 22 December 2000


Poland Decision No. 4/2000 of the Association Council of 29 December 2000


Romania Decision No. 2/2001 of the Association Council of 23 January 2001


Slovak Republic

Decision No. 2/2001 of the Association Council of 22 February 2001


Slovenia



Estonia Decision No. 3/2001 of the Association Council of 19 February 2001


Latvia

Lithuania Decision No. 1/2001 of the Association Council of 25 January 2001


135

LIST 5

CONSOLIDATED PROTOCOLS

List of Official Journals of the European Union in which the consolidated origin protocols have been published. This list is incomplete as not all protocols have been published at the time it has been established. As further protocols are published in the Official Journal the list will be updated to include them. Origin Protocol

between the EC and

Decision and Protocol No. Official Journals(L Series)


Decision No. 38/2003 of the Joint Committee of 14 March 2003

No. L 137 of 5 June 2003

Bulgaria Decision No. 1/2003 of the Association Council of 4 June 2003 Protocol No. 4

No. L 191 of 30 July 2003

Hungary Decision No. 6/2002 of the Association Council of 20 December 2007 Protocol No. 4

No. L 119 of 14 May 2003

Poland Decision No. 1/2003 of the Association Council of 25 February 2003 Protocol No. 4

No. L 142 of 10 June 2003

Slovak Republic

Decision No. 1/2003 of the Association Council of 6 February 2003 Protocol No. 4

No. L 166 of 3 July 2003

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=22003D0021&model=guicheti


http://europa.eu.int/eur-lex/en/dat/2003/l_191/l_19120030730en00030115.pdf


http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_119/l_11920030514en00030115.pdf


http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_142/l_14220030610en00030115.pdf


http://europa.eu.int/eur-lex/en/dat/2003/l_166/l_16620030703en00030115.pdf

136

APPENDIX 2

Different linguistic versions of expressions to be used on proofs of origin and in making out invoice declarations

Appendix 2 sets out in one place for the convenience of users of this Handbook all the linguistic versions of the terms and expressions that must be used in certain circumstances on proofs of origin. The five terms or expression set out in this appendix relate to the following situation. 1. Retrospectively issued movements certificates EUR.1 (See Article 18 (4)) 2. Duplicate EUR.1 movement certificates EUR.1 (See Article 19 (2)) 3. When a proof of origin is rejected for technical reasons. (See Explanatory

Note to Article 18) 4. Where the proof of origin is considered to be inapplicable. (See Article 32,

Explanatory Note "Refusal of preferential treatment without verification" to) 5. Making out an invoice declaration. (See Article 21, Explanatory Note "Practical

application of the provisions concerning invoice declaration") Each origin protocol will contain these terms and expressions in all working languages of the Community and the language of the country concerned. by the protocol. (RETURN TO CONTENTS)

137

1. Retrospectively issued movements certificates EUR.1 (Article 18(4)) AD EMES A POSTERIORI BG ИЗДАДЕНО А ПОСТЕРИОРИ CZ VYSTAVENO DODATEČNĚ DE NACHTRÄGLICH AUSGESTELLT DK UDSTEDT EFTERFØLGENDE EE TAGANTJÄRELE VÄLJAANTUD ES EXPEDIDO A POSTERIORI FI ANNETTU JÄLKIKÄTEEN FR DELIVRE A POSTERIORI GB ISSUED RETROSPECTIVELY GR ΕΚ∆ΟΘΕΝ ΕΚ ΤΩΝ ΥΣΤΕΡΩΝ HU KIADAVA VISSZAMENŐLEGES HATÁLLYAL IS ÙTGEFID EFTIR Á IT RILASCIATO A POSTERIORI LT IDUOTAS PO EKSPORTAVIMO LV IZDOTS PĒC PREČU EKSPORTA NL AFGEGEVEN A POSTERIORI NO UTSTEDT SENERE PL WYSTAWIONE RETROSPEKTYWNIE PT EMITIDO A POSTERIORI RO EMIS A POSTERIORI SE UTFÄRDAT I EFTERHAND SI IZDANO NAKNADNO SK VYSTAVENÉ DODATOČNE TR SONRADAN VERILMISTIR

138

2. Duplicate movement certificates EUR.1 (Article 19(2))

AD DUPLICAT BG ДУБЛИКАТ CZ DUPLIKÁT DE DUPLIKAT DK DUPLIKAT EE DUBLIKAAT ES DUPLICADO FI KAKSOISKAPPALE FR DUPLICATA GB DUPLICATE GR ΑΝΤΙΓΡΑΦΟ HU MÁSODLAT IS EFTIRRIT IT DUPLICATO LT DUBLIKATAS LV DUBLIKATS NL DUPLICAAT NO DUPLIKAT PL DUPLIKAT PT SEGUNDA VIA RO DUPLICAT SE DUPLIKAT SI DVOJNIK SK DUPLIKÁT TR IKINCI NUSHADIR

139

3. When a movement certificate is rejected for technical reasons (Explanatory Note to Article 18)

AD DOCUMENT REBUTJAT BG ДОКУMЕНТbТ MЕ Е ПРИБТ CZ DOKUMENT NEAKCEPTOVÁN DE DOKUMENT NICHT ANGENOMMEN DK AFVIST DOKUMENT EE DOKUMENTI EI AKTSEPTEERITUD ES DOCUMENTO RECHAZADO FI ASIAKIRJA HYLÄTTY FR DOCUMENT REFUSÉ GB DOCUMENT NOT ACCEPTED GR ΑΠΟΡΡΙΠΤΕΤΑΙ HU NEM ELFOGADOTT OKMÁNY IS SKJALI HAFNAD IT DOCUMENTO RESPINTO LT DOKUMENTAS NEPRIIMTAS LV DOKUMENTS NAV AKCEPTÉTS NL DOCUMENT GEWEIGERD NO DOKUMENT IKKE AKSEPTERT PL DOKUMENT NIEZAAKCEPTOWANY PT DOCUMENTO RECUSADO RO DOCUMENT NEACCEPTAT SE EJ GODTAGET DOKUMENT SI DOKUMENT NI SPREJET SK DOKUMENT NEPRIJATÝ TR BELGE KABUL EDILMEMIŞTIR

140

4. When a proof of origin is considered inapplicable (Article 32, Explanatory Note "Refusal of preferential treatment without verification")

AD INAPLICABLE BG MЕПРИДОХИM CZ NEPOUITELNÝ DE NICHT ANWENDBAR DK UANVENDELIGT EE AKTSEPTEERIMATA ES INAPLICABLE FI EI VOIDA KÄYTTÄÄ FR INAPPLICABLE GB INAPPLICABLE GR ΜΗ ΑΠΟ∆ΕΚΤΟ HU ALKALMATLAN IS ONOTHFEFT IT INAPPLICABILE LT NETINKAMAS LV NEDERIGS NL NIET VAN TOEPASSING NO UGYLDIG PL NIESTOSOWANY PT NÃO APLICÁVEL RO INAPLICABIL SE OANVÄNDBART SI NEUSTREZNO SK NEPOUITEùLNÝ TR GEÇERSIZDIR

141

5. Invoice declaration (Article 21(4))

Catalan version (AD)

Lexportador dels productes inclosos en el present document (Autorizació duanera N°), declara que, llevat sindiqui el contrari, aquestos productes gaudeixen dun origen preferencial ...........

Bulgarian version (BG)

Износителят на продукте, покрити от настоящия Документ (митническо разрешение номер ...), Декларира, освен ако не е ясно указано противното, че тези иродукти са от .... преференциален ироизход.

Czech version (CZ)

Vývozce výrobků uvedených v tomto dokumentu (číslo povolení ...) prohlauje, e kromě zřetelně označených, mají tyto výrobky preferenční původ v ....

German version (DE)

Der Ausführer (Ermächtigter Ausführer; Bewilligungs-Nr. ...) ,, der Waren, auf die sich dieses Handelspapier bezieht, erklärt, dass diese Waren, soweit nicht anders angegeben, präferenzbegünstigte ... Ursprungswaren sind.

Danish version (DK)

Eksportøren af varer, der er omfattet af nærværende dokument, (toldmyndighedernes tilladelse nr. ...), erklærer, at varerne, medmindre andet tydeligt er angivet, har præferenceoprindelse i ....

Estonian version (EE)

Käesoleva dokumendiga hõlmatud toodete eksportija (tolliameti kinnitus Nr. ... ) deklareerib, et need tooted on ... sooduspäritoluga, välja arvatud juhul kui on selgelt näidatud teisiti.

Spanish version (ES)

El exportador de los productos incluidos en el presente documento (autorización aduanera n° ... ) declara que, salvo indicación en sentido contrario, estos productos gozan de un origen preferencial ....

Finnish version (FI)

142

Tässä asiakirjassa mainittujen tuotteiden viejä (tullin lupan:o ...) ilmoittaa, että nämä tuotteet ovat, ellei toisin ole selvästi merkitty, etuuskohteluun oikeutettuja ... alkuperätuotteita.

French version (FR)

L'exportateur des produits couverts par le présent document (autorisation douanière n°...), déclare que, sauf indication claire du contraire, ces produits ont l'origine préférentielle ... .

English version (GB)

The exporter of the products covered by this document (customs authorization No ...) declares that, except where otherwise clearly indicated, these products are of ... preferential origin.

Greek version (GR)

Ο εξαγωγέας των προϊόντων που καλύπτονται από το παρόν έγγραφο (άδεια τελωνείου υπ΄αριθ. ....) δηλώνει ότι, εκτός εάν δηλώνεται σαφώς άλλως, τα προϊόντα αυτά είναι προτιµησιακής καταγωγής .....

Hungarian version (HU)

A jelen okmányban szereplő áruk exportőre (vámfelhatalmazási szám: ) kijelentem, hogy eltérőö jelzés hiányában az áruk kedvezményes származásúak.

Icelandic version (IS)

Útflytjanđi framleidsluvara sem skjal Ţetta tekur til (leyfi tollyfirvalda nr. ... ), lýsir Því yfir ad vörurnar séu, ef annars er ekki greinilega getid, af ....-friđindauppruna .

Italian version (IT)

L'esportatore delle merci contemplate nel presente documento (autorizzazione doganale n. ...) dichiara che, salvo indicazione contraria, le merci sono di origine preferenziale ....

Lithuanian version (LT)

iame dokumente ivardintų prekių eksportuotojas (muitinės liudijimo Nr ... ) deklaruoja, kad, jeigu kitaip nenurodyta, tai yra ... preferencinės kilmės prekės.

143

Latvian version (LV)

Eksportētājs produktiem, kuri ietverti ājā dokumentā (muitas pilnvara Nr. ... deklarē, kā, izņemot tur, kur ir citādi skaidri noteikts, iem produktiem ir priekrocīibu izcelsme no ....

Dutch version (NL)

De exporteur van de goederen waarop dit document van toepassing is (douanevergunning nr. ...) verklaart dat, behoudens uitdrukkelijke andersluidende vermelding, deze goederen van preferentiële ... oorsprong zijn.

Norwegian version (NO)

Eksportøren av produktene omfattet av dette dokument (tollmyndighetenes autorisasjonsnr. ... )erklærer at disse produktene, unntatt hvor annet er tydelig angitt, har .... preferanseopprinnelse .

Polish version (PL)

Eksporter produktów objetych tym dokumentem (upoważnienie wladz celnych nr ...) deklaruje, że z wyjątkiem gdzie jest to wyraźnie okreslone, produkty te mają ... preferencyjne pochodzenie.

Portuguese version (PT)

O abaixo assinado, exportador dos produtos cobertos pelo presente documento (autorização aduaneira n° ...), declara que, salvo expressamente indicado em contrário, estes produtos são de origem preferencial ....

Romanian version (RO)

Exportatorul produselor ce fac obiectul acestui document (autorizaţia vamală nr. ... ) declară că, exceptând cazul în care în mod expres este indicat altfel, aceste produse sunt de origine preferenţială ... .

Swedish version (SE)

Exportören av de varor som omfattas av detta dokument (tullmyndighetens tillstånd nr. ...) försäkrar att dessa varor, om inte annat tydligt markerats, har förmånsberättigande ... ursprung.

144

Slovenian version (SI)

Izvoznik blaga, zajetega s tem dokumentom (pooblastilo carinskih organov t .....)izjavlja, da, razen če ni drugače jasno navedeno, ima to blago preferencialno .... poreklo.

Slovak version (SK)

Vývozca výrobkov uvedených v tomto dokumente (číslo povolenia ...) vyhlasuje, e okrem zretel'ne označených, majú tieto výrobky preferenčný pôvod v ...

Turkish version (TR)

Isbu belge (gümrük onay No:..) kapsamindaki maddelerin ihracatçisi aksi açikça belirtilmedikçe, bu maddelerin . menseli ve tercihli maddeler oldugunu beyan eder.

Documents

A User's Handbook to the Rules of Preferential Origin used in trade